In the May 14, 2008 Issue:

Copyright State Science & Technology Institute 2008. 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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 Submit Your 2008 Excellence in TBED Award Applications by May 16
This Friday, May 16, is the final day to submit your TBED initiative for consideration in SSTI’s premier national competition that showcases best practices and out-of-the-box thinking across six categories focusing on several elements found in successful tech-based economies.
 
An SSTI Excellence in TBED Award distinguishes your initiative as a best practice worthy of emulation in the TBED community through your successful efforts to:

Do not miss this opportunity to showcase the accomplishments of your initiative.
 
Applications are due Friday, May 16 at 5 p.m. ET. For more information, please visit www.ssti.org/awards.htm.

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Expanded Funds for TBED in North Carolina FY 2008-09 Budget Adjustment
Operating with a $152 million surplus for the current fiscal year, Gov. Mike Easley unveiled his recommended budget adjustments for FY 2008-09 earlier this week, providing additional funding for university projects and expanding TBED initiatives. North Carolina is one of a shrinking number of states to still project black ink for its next fiscal year.
 
Lawmakers approved the FY 2007-09 biennial budget last July, allocating $20.7 billion each fiscal year and making appropriations for fiscal year 2008 (see the Aug. 1, 2007 issue of the Digest). The proposed $21.5 billion budget for FY 2008-09 includes reductions, expansions and adjustments among state agencies, reflecting $396 million in general fund budget cuts and tax increases for alcohol and cigarettes. Appropriations recommended by the governor for the Department of Commerce include:

Gov. Easley’s budget recommendation provides a 4.1 percent increase over FY 2007-08 for the University of North Carolina. Continuing the state’s efforts to build a nationally ranked top 10 bioengineering program, the governor recommends $2 million for new faculty in bioengineering and other areas in the North Carolina State University College of Engineering. Additionally, the governor recommends a recurring $6 million appropriation to ensure broadband connectivity within public schools.
 
Gov. Easley’s FY 2008-09 recommended budget adjustments are available at: http://www.osbm.state.nc.us/files/pdf_files/2008-2009_adjustments.pdf

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Maine Governor Pocket Vetoes Fund of Funds Legislation
“I recognize the importance of attracting venture capital and new investments to Maine,” Gov. John E. Baldacci said. The governor later added, “However, as it is currently written the bill carries enormous risk. This bill would guarantee a rate of return for venture capital investors while Maine would shoulder all the risk. The potential liability for the State is too great for me to sign this bill.”
 
By not signing the bill, Gov. Baldacci pocket vetoed LD 2320, entitled "An Act To Stimulate Capital Investment for Innovative Businesses in Maine.” The act would have created a Maine Fund of Funds program within the state’s Small Enterprise Growth Board to increase availability of venture capital.
 
Modeled on statutes in Arkansas, Iowa, Michigan, Montana and Utah, LD 2320 authorized up to $80 million in refundable tax credits to capitalize the fund. No more than $10 million in tax credits could be redeemed in a single year; however, the fiscal note for the legislation determined the maximum potential loss in revenue to the state for any one fiscal year could reach $18.96 million.
 
The legislation permitted the Small Enterprise Growth Board to hire a director, who in turn had the authority to invest outside Maine to minimize the risk to the state of the tax credits actually being redeemed and to maximize returns.
 
That balance between local economic development and maximizing returns to investors is a perennial challenge for public efforts to increase access to capital, SSTI found in its research for A Resource Guide for Technology-based Economic Development.
 
Gov. Baldacci isn’t opposed to identifying a better model, however.
 
“This idea deserves more investigation and discussion and holds the potential to be a new economic development tool,” the Governor said as he withheld his signature from the bill.
 
LD 2320 is available at: http://www.mainelegislature.org/legis/bills/ld.asp?ld=2320

A Resource Guide for Technology-based Economic Development may be downloaded as a PDF at: 
http://www.ssti.org/Publications/Onlinepubs/resource_guide.pdf.

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Missouri General Assembly Approves Funds for Life Science Research, STEM
The General Assembly approved the fiscal year 2009 budget last week, providing $21 million for the Life Sciences Research Trust Fund. Established in 2003, the fund was created to support life science research, commercialization, and technology transfer using a portion of the state’s tobacco settlement funds. The FY09 appropriation will be administered by the Life Sciences Research Board, which is responsible for awarding grants and contracts for research.
 
Last year, the General Assembly approved a one-time appropriation of $13.4 million for the fund dedicated to research focusing on animal and health nutrition, renewable energy and plant sciences (see the May 21, 2007 issue of the Digest).
 
The FY09 budget includes $1 million for eMINTS – a statewide instructional model for teachers – in support of the Missouri Mathematics, Engineering, Technology and Science (METS) Initiative. The goal of the METS program is to support schools in creating school-wide reform for improved instruction and student achievement in the science, technology, engineering and mathematics (STEM) fields. Gov. Matt Blunt recommended $5 million for technologically advanced classrooms with advanced math and science curriculum during his State of the State Address earlier this year (see the Jan. 16, 2008 issue of the Digest).
 
Lawmakers approved $250,000 – $500,000 less than the governor’s recommendation – to train new Advanced Placement teachers and provide funding assistance for students who earn college credits during high school and for fees associated with mathematics and science exams for college placement.
 
The corresponding budget bills await the action of Gov. Blunt and include HB 2002, HB 2003 and HB 2007.

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Colorado Legislative Success for Bioscience, Energy Projects
Early-stage Colorado bioscience companies and researchers in clean and alternative energy working to commercialize new technologies are among the victors of Colorado’s legislative session that ended last week.
 
To encourage bioscience research and speed technology commercialization, Gov. Bill Ritter signed into law HB 1001, establishing the Colorado Bioscience Research Grant Program. The grant program will provide $26.5 million over five years to research institutions and private companies, beginning with $5.5 million this year. Unveiled by the governor last fall, the program is the first portion of the administration’s business development package to be approved by legislators (see the Oct. 3, 2007 issue of the Digest).
 
The legislation mandates that at least 30 percent of the funds go toward university and research institution technology transfer offices to accelerate the development of research projects focusing on life sciences, engineering, material sciences, computer sciences, photonics or nanotechnology. Another 30 percent of the funds will go to early-stage bioscience companies that are commercializing technology from a Colorado research institution or technology transfer office. Other funds will be distributed for infrastructure development.
 
Research institutions are eligible for $150,000 per project, and grants of up to $250,000 per project will be awarded to Colorado companies that have received no more than $5 million in funding and employ 20 or fewer people. The program will be administered by the Colorado Office of Economic Development.
 
Adding to the excitement surrounding the bioscience industry throughout the state, Colorado State University announced in March a new Clean Energy Supercluster, dubbed "Cenergy," to help accelerate the university’s clean energy research to the marketplace. Superclusters are an alliance of academic researchers, economists and business experts organized to address global challenges and encourage collaboration among business and academia.
 
Gov. Bill Ritter also signed the fiscal year 2008-09 budget into law last week, providing $7.65 million for the Clean Energy Fund, $2 million for the Colorado Renewable Energy Authority, and $2 million for solar incentives.
 
The Clean Energy Fund appropriation will be used to attract renewable energy industry investment, assist researchers in transferring technology to the marketplace, and provide incentives for the use of energy efficient and renewable energy products, according to the governor’s office.
 
The enacted budget, HB 1375, may be viewed through the Colorado General Assembly at: http://www.leg.state.co.us/

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DOE Maps Plan for 20 Percent Wind Energy by 2030
Unprecedented investment in alternative energy technologies and growing awareness about the need for clean and renewable energy production have driven many states to initiate strategies to promote alternative forms of power generation, such as solar, hydroelectric, geothermal and wind power. Most current government strategies, however, fall short of what will be needed to build a truly reliable, affordable and clean energy portfolio in the U.S., according to a new study from the U.S. Department of Energy (DOE). The key to creating portfolios that accomplish all of these goals will be diversity. No one source of power will be able to support the nation's need for electricity, but a diverse portfolio of many power sources may be able to provide a flexible and sufficient power supply.
 
Wind has emerged as one of the more affordable and common alternative sources of power. The cost of drawing power from wind has fallen 90 percent over the past 20 years, making wind power an increasingly viable alternative for regions with the necessary geographic attributes and which have the infrastructure to accommodate wind farms (see the Oct. 23, 2006 special issue of the Digest). The DOE report examines the necessary steps and outcomes of building a larger wind infrastructure, one that could provide 20 percent of the nation's power by 2030.
 
One of the most pressing changes required to make this 20 percent scenario possible is the expansion of the U.S. power transmission grid. The current grid is already taxed by congestion and in need of an overhaul, but increasing the availability of wind power would require even greater changes. Capacity would have to be increased in regions that are geographically favorable to the production of wind power. The pace of construction for new wind installations also would have to increase substantially. Currently, wind power generation is increasing at roughly 3 gigawatts (GW) a year, a number that would have to grow to 16 GW by 2018 and continue growing at that pace through 2030. This would bring the pace of wind installations in line with the current increase in natural gas units.
 
The report outlines many of the benefits that the increase in wind power production would have for the country. Most importantly, it would diversify U.S. power generation, keeping prices stable and helping to increase the amount of available power without the country becoming more dependent on coal and other polluting sources of energy. The 20 percent scenario would also:

Still, the transition to wind will involve substantial investment, mostly tied up in incremental costs associated with initial capital investments. Though wind farms and plants offer lower ongoing costs than other traditional means of power generation, the initial investment is substantially higher. The report downplays these costs, noting that the energy investment in the 20 percent scenario would amount only $43 billion more than an alternative scenario in which no increase in wind power occurs.
 
Though the report does not go into detail about what role state governments would play in supporting wind power, many states have already taken an active role in building a stronger wind industry. Since 2001, 21 states have introduced renewable portfolio standards, all of which call for some increase in the percent of energy drawn from wind. None of the initiatives, the report notes, are as long-term as the scenario sketched out by DOE and only California, Nevada and New York call for wind energy to represent as much as 20 percent of the total power sourcing.
 
Many universities have also increased their focus on wind energy. Recently, the University of Wyoming announced their plans for a UW Wind Energy Research Center. BP America Inc. has provided $2 million for the center, which may be eligible for matching funds from the state legislature. The funds will be used to begin construction of a building for the center, which will include a large, closed-loop wind tunnel. Texas Christian University also recently announced a five-year partnership with Oxford University Environmental Change Institute and FPL Energy LLC to examine the socio-economic and environment impacts of wind power. The partners hope to use their research to mitigate some of the negative consequences of wind power on animals and animal habitats and the impact on local communities.
 
Download the DOE report 20% Wind Energy by 2030: Increasing Wind Energy's Contribution to U.S. Electricity Supply at: http://www.20percentwind.org/20percent_wind_energy_report_05-11-08_wk.pdf

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Regional Efforts in Southeast Michigan Leads to Shared Impact Report
Rallying the myriad local organizations, chambers of commerce and political jurisdictions of any large metropolitan area toward a shared economic development agenda is challenging. To twist a phrase from supply-side economics, the “trickle around” theory of benefits – when any major economic development project occurs in one community will have spillover benefits for the entire region – is a tough sell to communities and school systems trying to keep their budgets in the black.
 
True success most likely requires radical transformation of several institutions, consolidated tax and revenue sharing systems, and fundamental shifts in one's sense of belonging to a particular place.
 
That last element, shifting the sense of belonging to a larger region, is a regular challenge for watershed management systems, which, among their other responsibilities, try to get the residents of a particular area to realize the watershed ignores the arbitrarily drawn political jurisdictions we create. We all live upstream and/or downstream from somewhere else and are affected by the activities occurring in those other places.
 
Similar efforts are required for regional transformation toward improved economic competitiveness. Detroit Renaissance, a private nonprofit organization composed “exclusively of the chief executive officers of the region’s most significant employers and largest universities,” is attempting to help define Southeast Michigan as a single regional economy.
 
In actuality, it already is one economy, so in theory the project should be relatively easy. Its institutions to support and encourage innovation, however, have historically not seen it that way – in Michigan or elsewhere in the country.
 
One of the approaches Detroit Renaissance used was the creation of the Economic Development Coalition of Southeast Michigan last November. This week, the group released an “annual report” summarizing and highlighting the collective impact of 13 local, county, metro and state economic development organizations serving in the region. The group’s members include tech-based economic development organizations such as Ann Arbor SPARK, Automation Alley and TechTown, conventional business recruitment and retention efforts such as the Detroit Economic Growth Corporation, and a tourism board to several county and regional planning groups.
 
Individually, their annual reports may not gather much attention. Collected in the single report for 2007, however, the results are more impressive: 16,610 new jobs created and 9,552 jobs retained. New investment into the region totaled $4 billion through 117 different projects. One subtle or possible result of the report is to help journalists, the individual member organizations, their client businesses, and residents of the area to transform their definition of "place" to one that is more encompassing of the broader Southeast Michigan region.
 
More information about the report is available at: http://www.detroitrenaissance.com
 
Encouraging Regional Innovation
Achieving an integrated systems approach toward regional innovation support is the underlying theme of SSTI’s annual conference this year, which will be held at the Intercontinental Hotel in Cleveland, Oct. 14-16, 2008. The overwhelming value of attending the premiere TBED conference of the year is becoming well known -- registrations are ahead of last year’s event, which sold out. More information is available at www.ssticonference.org.

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Leveraging Partnerships between Federal Laboratories and TBED Organizations
Last week, the Federal Laboratory Consortium for Technology Transfer (FLC) held its annual national meeting in Portland, Ore. The gathering brought together laboratory technology transfer specialists, industry representatives and state and regional TBED organizations, among others, to discuss pertinent issues such as changes in federal legislation affecting intellectual property and SBIR reauthorization, STEM education initiatives, funding opportunities, and best practices for encouraging the successful commercialization of research. The conference also served as an entry point for those new to collaborating with the nation’s system of federal laboratories, presenting their tools and programs that can be used to enhance commercialization partnerships. 
 
At the invitation of the FLC’s State & Local Government Committee, SSTI joined the leadership of two state TBED organizations in a conference session describing the landscape of state tech-based economic development and exploring best practices and examples of collaborative efforts. From a federal laboratory’s perspective, partnering with a state TBED organization makes sense because many have connections to political leadership and access to funds for investment and infrastructure; collaborate with in-state universities and companies; can act as a gateway to specialized equipment within the state; and have connectivity to the state’s regions. This being said, the size and capabilities of each state’s TBED resources are often as varied as the diverse collection of the individual federal laboratories spread throughout the U.S.
 
Lee Cheatham, executive director of the Washington Technology Center, stressed in his presentation that technology companies are looking for opportunities where often risk is lowest and seek partners who can provide valued assistance. Federal laboratories can be those partners. The federal labs have the unique opportunity to make technology approachable though their outreach and interactions with industry partners. Additionally, the labs can influence policy and act as an access point to those wishing to explore the technology and innovation ecosystem.
 
Deborah Clayton, commissioner of Kentucky’s Department of Commercialization and Innovation, believes the best partnerships are the ones that involve “wins” for not only state TBED organizations and industry, but also the federal labs and other stakeholders at the table. Her presentation highlighted the success of past Department of Energy initiatives such as AMTEX, a cooperative R&D partnership between the U.S. textile industry DOE laboratories. Clayton recommended the re-establishment of one of these initiatives, the Laboratory Technology Research Program, which bridged the gap between basic research and technology development by incorporating cost-shared partnerships with the private sector.
 
Additionally, she advised TBED organizations to identify their state or regional strengths and resources in advance of pursuing partnerships and to become informed on the strengths and resources of nearby laboratories. TBED organizations can also be proactive by:

The goal is to create mutually beneficial partnerships. Just as TBED organizations and associated companies can explore the technologies being created within the federal laboratory system, TBED leaders can provide the connections and technologies that enable the components of the federal laboratory system to realize their missions.
 
The agenda for the 2008 FLC National Meeting can be found at:
http://www.federallabs.org/meeting/2008/agenda/
 
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