In the July 23, 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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Michigan Universities Join Forces for $75M Entrepreneurship Initiative
A consortium of Michigan’s 15 public universities recently announced a decade-long initiative to launch 200 new businesses in the state. The Michigan Initiative for Innovation and Entrepreneurship (MIIE) plans to raise and distribute $75 million over the next seven years through grants for commercialization projects, university-industry partnerships and entrepreneurship education. Last week, the initiative made its first round of awards, which included 20 grants totaling $1.3 million. Another $2.2 million in matching funds is expected for this round of awardees from private businesses and universities.

Funding for the round of grants was provided by the C.S. Mott Foundation, which also helped launch the initiative with a $2 million grant late last year. MIIE plans to raise future funds through partnerships and donations from other philanthropic foundations around the state. Two-thirds of the funds raised by the initiative will support awards through the Technology Commercialization Fund, which funds specific steps to move a technology to market through a new company or licensing. The remaining amount will support the Industry and Economic Engagement Fund for university-industry collaborations and the Talent Retention and Entrepreneurship Education Fund for faculty development and resources.

In all, 13 of the 15 member institutions received grants from this round of awards. Highlights include:

The next round of awards in all three categories is expected this fall.

MIIE officials believe that the goal of 200 businesses in 10 years is possible based on the results from similar investments through the Michigan Universities Commercialization Initiative (MUCI). MUCI is a similar collaboration between 13 state universities, which began in 2001 and currently derives its funding through Michigan’s 21st Century Fund. Since its inception, MUCI has invested $6 million into projects related to commercialization and led to 27 business starts. MIIE’s grants are similar to those offered through MUCI’s $4.5 million Challenge Fund and would continue to support commercialization projects should MUCI lose its funding. MIIE committee member told Crain’s Detroit Business that MIIE is envisioned as the next generation of MUCI.

For more information on the Michigan Initiative for Innovation and Entrepreneurship, visit: http://www.pcsum.org/miie.html

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Broadband RoundUp: States Expand Efforts to Increase High-speed Internet Access

California
California Gov. Arnold Schwarzenegger has signed a bill authorizing community service districts to provide high-speed Internet services in areas in which no private company has done so. The districts, which provide basic infrastructure such as water, sewer and police services, will help extend broadband access into rural areas of the state that remain underserved. The bill reflects the recommendations of the California Broadband Task Force, which was created in 2006 by Gov. Schwarzenegger and presented its findings in January (see the Dec. 4, 2006 issue of the Digest).

This action comes on the heels of a new report from the Public Policy Institute of California and the California Emerging Technology Fund, which finds that the digital divide in the state is growing between key demographics. Rural residents are marginally less likely to have access to a high-speed connection than urban dwellers, but some groups in both urban and rural areas are less likely to have access. Less than half of Hispanics in the state have home computers and only about a third have access to a broadband connection. About two-thirds of white, black and Asian residents have at-home broadband access. Computer use for Hispanic residents has actually declined since 2000. Broadband use has also been decreasing among low-income residents around the state. This suggests that much of the state’s digital divide problem could be linked to the high cost of access and a lack of competition.

Critics of the new legislation say it will do little to increase competition and may unfairly benefit Internet provider companies. The new legislation permits the community service district to build out broadband networks but compels them to sell or lease those networks to private companies if one wants to start providing services. Thus, it will fall on the local districts to bear the expense of buildout, but the profits could ultimately go to private Internet service providers. The task force report argues that linking Internet access to basic infrastructure services will go a long way to emphasize the necessity of broadband for economic opportunity and growth.

Read the legislation at: http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sb_1191&sess=CUR&house=B&author=alquist

Massachusetts
On Wednesday, the Massachusetts legislature approved a bill to expand broadband access in underserved areas of the state. Gov. Deval Patrick originally unveiled the bill last year to promote private investment in high-speed Internet capacity. The bill would provide $40 million in bond funding to create an incentive fund for public-private broadband partnerships under the Massachusetts Technology Collaborative (MTC). A new body, the Massachusetts Broadband Institute within MTC would have direct oversight over the fund and would conduct further research into broadband availability and competition.

Read the current version (H. 4864) at: http://www.mass.gov/legis/bills/house/185/ht04pdf/ht04864.pdf

Minnesota
Minnesota has taken the next step in shaping its broadband strategy. Gov. Tim Pawlenty recently announced the appointment of 20 public and private state leaders to Minnesota’s new High-Speed Broadband Task Force. Appointees include representatives from the state major employers, telecommunications companies, local and state governments and universities. The group will begin meeting in August and is to produce a report by November 2009 that will map out where high-speed Internet is available in the state and what kind of speeds are being offered. They will also begin evaluating financing programs used in other states to expand service.

Read more at: http://www.state.mn.us/portal/mn/jsp/content.do?contentid=536916528&contenttype=EDITORIAL&agency=Commerce

North Carolina
North Carolina’s recently signed budget for the 2008-09 fiscal year includes $1.5 million for the e-NC Authority broadband efforts. The funding will be used to increase the availability of residential Internet connectivity in underserved areas of the state. e-NC awards connectivity incentive grants with matching requirements to qualified service providers to expand high-speed access. The authority also provides financial support to rural business and technology telecenters and capital expenditure grants for local governments.

Visit the e-NC website at: http://www.e-nc.org/index_no_video.asp

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Recent Research
How College Attainment and Occupational Skills Impact Metro Area Wealth
Searching for good reasons to support localized college scholarship programs for urban residents? A recent working paper from the Federal Reserve Bank of New York provides convincing evidence: a one point increase in the percentage of residents with a college degree is associated with a 2.3 percent increase in a metro area's gross domestic product (GDP) per person.

While not the subject of the paper, community and regional policymakers may expect if they couple this fact with the other benefits associated with having a more educated populace - such as lower crime rates, lower vacancy rates, higher property values, and more entrepreneurship - that subsidized higher education programs should "pay" for themselves through higher tax revenues and lower costs to the public.

In Human Capital and Economic Activity in Urban America, Jaison Abel from the Federal Reserve Bank of New York and Todd Gabe from the University of Maine explore the relationship between various measures of human capital and the economic activity within a metro region. Their work contributes to the discussion of why public policy intervention for ameliorating a region's education and knowledge base makes sense, especially in the intention of increasing per capita wealth.

Abel and Gabe examine not only how the amount of education, but also how the strength of certain knowledge-based skill sets impacts the level of economic activity within a metro area. After aligning knowledge skills with certain types of occupations, they find metros with collections of information technology employees, and "producer services" employees - those involved with management, accounting, law and government - are the top drivers of GDP per capita.

Additionally, the authors examine the impact of the relative size of certain occupation groups. They find, keeping all else equal, increasing the size of a metro's executive and management positions by one standard deviation from the mean increases GDP per capita by 10.4 percent. However, increasing the size of a metro's educator, librarian, and writer positions by one standard deviation is associated with a 12.5 percent decline in GDP per capita.

Abel and Gabe's research utilizes the fairly recent practice of the U.S. Bureau of Economic Analysis of estimating the GDP in each of the U.S. metro areas. After averaging the GDP per person from 2001 to 2005, the authors first performed regressions using 290 metro areas to test the influence of college degree attainment while controlling for factors such as annual investment in capital equipment and software, annual investment in capital structures, the metro's population, and regional geographic effects.

Keeping all other variables constant, they found improving the amount spent on capital equipment by $1,000 per worker in the metro increases GDP per capita by 20 percent, and expanding a metro area's population by one million people results in a 3.3 percent increase in GDP per person. However, when comparing these variables to each other, college attainment outperforms the others. By changing by one standard deviation from the mean the percentage of college attainment, the amount spent on capital equipment, and the population, the GDP per capita is altered by 17 percent, 11 percent and 5 percent, respectively.

Human Capital and Economic Activity in Urban America can be found at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1161184

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Useful Stats
Value-added Manufacturing by State, 2002-2006
Every year, the U.S. Census Bureau compiles data at the national and state levels describing the performance of the manufacturing sector within the U.S. While the data are usually included in the Census’ Annual Survey of Manufacturers, every five years the data can instead be found in the U.S. Economic Census. SSTI has prepared a table showing the state rankings for the percent change over the five-year period from 2002 to 2006 for the total value-added manufacturing, the value of shipments, and the value-added per employee for each state and the District of Columbia.

For the U.S. as a whole, the country’s value-added increased 22.1 percent, from $1.89 trillion in 2002 to $2.3 trillion in 2006. Louisiana, Wyoming, Montana, Delaware and Hawaii, respectively, led the nation in the percent increase in value-added manufacturing over this period.
 
Texas led the nation in 2006 with $528 billion in shipments from manufacturers. This was followed by California with $467 billion, Ohio with $284 billion and Illinois with $243 billion in shipments. Top-ranked Hawaii experienced a 111 percent increase in the value of shipments, rising from $3.5 billion in 2002 to $7.3 billion in 2006. Louisiana, Montana, Wyoming and Alaska followed in the ranking of percent increase in shipments during the five-year period. Michigan and Idaho were the only two states to experience a decrease in the value of shipments from manufacturers during that time, as the nation’s total rose 28.2 percent from 2002 to $5.02 trillion in shipments in 2006.
 
The average value-added per employee in manufacturing in the U.S. as a whole increased from $128,485 in 2002 to $177,485 in 2006 – a 38.2 percent increase. Louisiana, Wyoming, New Mexico, Delaware, and Texas experienced the highest value-added per employee in 2006.
 
To see where each state is ranked in these categories, visit SSTI's table at: http://www.ssti.org/Digest/Tables/072308t.htm

The original data from the latest Annual Survey of Manufacturers and the U.S. Economic Census can be found at: http://www.census.gov/epcd/www/recent.htm

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Last Call for Sponsors before SSTI Conference Brochure Mailed to Nation's TBED Community
Being associated with the premiere professional development event of the year for the nation's technology-based economic development community can yield tremendous returns for your company, organization or program. Exposure and unrivaled networking opportunities are presented through SSTI's annual conference -- broadening the reach and deepening the impact of your marketing dollars. Last year’s sold-out conference included more than 350 representatives from 48 states and four countries. Sponsorship opportunities exist to let professional attendees know that your organization is actively involved in innovation and tech-based economic development.

Starting for as little as $2,000, you can highlight your organization -- and a conference registration is included! Your organization can take advantage of the powerful reputation of SSTI’s annual conference and connect with the leading thinkers and decision makers in the field. Only one exhibiting opportunity remains, and a limited number of additional recognized sponsorship categories is available, including recognition on the conference proceedings CD-ROM, morning yoga and fitness runs, Falcon after-hours lounge and video production for selected sessions.

Or you may wish to have your consulting firm, service organization or agency associate with the conference by becoming a Friend of TBED. Your $2,000 commitment to sponsor SSTI’s 12th Annual Conference as a Friend of TBED distinguishes your organization as a leading member of the TBED community, dedicated to helping SSTI ensure tech-based economic development professionals nationwide leave the conference with relevant, useful tools for encouraging regional innovation. And it includes:

Please contact Noelle Sheets at sheets @ ssti.org to become a Friend of TBED or request a complete listing of the current sponsorship opportunities. To be included in the brochure, contact Noelle as soon as possible, but before July 28.

For more information regarding SSTI's 12th Annual Conference, please visit http://www.ssticonference.org/.

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SSTI Job Corner
A complete description of this opportunity and others is available at http://www.ssti.org/posting.htm.

ASME is seeking someone to serve as manager of its strategic initiatives and innovation. The selected candidate will play a key role in the management of new ventures and strategic initiatives to help meet the priority objectives of the ASME Board of Governors and the enhancement of ASME revenues through development of new products and services. A bachelor's degree or equivalent and at least five years of relevant work experience are required.

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