Gov. Paterson signed the FY10 Transportation, Economic Development and Environmental Conservation Budget last week, providing $42.2 million of new appropriations for the New York Foundation for Science, Technology and Innovation (NYSTAR). This is a $6.2 million decrease from FY09. The figure does not include reappropriation carryovers from previous years.

The enacted budget also reforms the state’s Empire Zone program, mandating increased performance measures from companies that receive the tax breaks. Under the agreement, businesses already participating in the program are required to produce a 1:1 return on investment – far less than the governor’s proposal, which required a 20:1 return and applied to all businesses involved in the program. Additionally, the budget agreement moves up by one year the sunset date by which the program is scheduled to end to June 20, 2010.

Lawmakers approved the governor’s proposal to create the New York Higher Education Loan program, based on recommendations from the New York State Commission on Higher Education. The state is providing $50 million for the first year and $10 million a year thereafter to help capitalize a default reserve fund for low-interest student loans, according to the governor’s office.

Using $561.2 million in federal stimulus funding, lawmakers established the Senate’s Green Initiatives Institute, supporting green jobs and community development, according to a press release from the New York state Senate majority leader. The institute will operate through a competitive-grants program for municipalities, community colleges, nonprofit organizations, and small businesses, and focus on renewable energy development and distribution, weatherization, and retrofitting,

The FY10 budget agreement closes a $17.7 billion budget gap and reduces by $6.5 billion recurring spending. Tax and fee actions include a temporary income tax increase for high-wage earners, increased vehicle registration fees, a cigar tax, and a five-cent nickel deposit for bottled water.

The FY10 enacted budget bills are available at: http://www.budget.state.ny.us/budgetFP/enacted0910.html.

A recent survey from the China Venture Capital Association (CVCA) indicates that foreign investors remain confident in the country’s long-term prospects despite recent economic adjustments. Only 44 percent indicated that the economic downturn adversely affected their short-term confidence in China’s venture capital/public equity market, while all of the respondents said that their long-term confidence was either the same or unchanged. Most firms believe that the current readjustment will conclude in the next 1-3 years.

Many respondents indicated that the narrowing exit channels for venture-backed companies in other countries, particularly the U.S., have increased their interest in establishing funds with Chinese partners to invest in Chinese companies. While the U.S. venture market had no IPO exits in the first quarter of 2009, China has substantially improved its exit environment in recent years. Other factors driving investment in China include low investment costs and the large number of high-quality deal opportunities.

The CVCA survey finds that investors expect environmental protection and new energy, consumer products and services and healthcare to be the top three sectors for Chinese venture investment in the next two years. Investors also expect to invest more in education/training, traditional manufacturing and the Internet services sector.

For more information, CVCA’s Industry Survey Report is available at: http://www.cvca.com.cn/mail09/pe-vc090402/index_en.htm

Arkansas
Operating with a nearly $300 million surplus, lawmakers passed a spending plan last week that authorizes funds for several economic development projects, including $50 million for Gov. Mike Beebe’s Quick Action Closing Fund to attract new businesses to the state. 

Act 1415, approved by the legislature, authorizes up to $9.7 million for the Arkansas Science and Technology Authority in FY10. Additional funds for Science and Technology Authority projects are included in the General Improvement Fund (GIF) bill, which allocates surplus funds that may be distributed to the following projects at the governor’s discretion:

• $7.3 million for maintenance and operations of the Cyberinfrastructure Center for Applied Technology;
• $5 million to the Arkansas Research Infrastructure Fund for grants for research, research infrastructure and researchers;
• $3 million for Research Matching Grants to provide state matching funds to leverage federal funds;
• $3 million for Centers for Applied Technology Grants to support allied technology in areas of advanced materials and manufacturing systems, agriculture, food sciences, environmental sciences, biotechnology, bioengineering, life sciences and information technology;
• $3 million to the Arkansas Risk Capital Matching Fund for technology validation and enterprise development investments;
• $2 million for Basic Research Grants to fund original innovative investigators for the advancement of scientific or technical knowledge;
• $1 million for Seed Capital Investments in early-stage companies in Arkansas; and,
• $500,000 for Post-Doctoral Scientist and Engineering Grants to Arkansas companies that employ qualifying graduates.

Another $3 million is included for the Innovate Arkansas Fund to provide assistance to startup technology companies and $500,000 is authorized for activities associated with the implementation of the governor’s strategic plan for economic development. To finance various projects of the House and Senate, the GIF authorizes $30 million from the surplus to each chamber. Legislators agreed to use $100 million in surplus funds to fill budget gaps in FY10.

The legislature also passed a bill creating the Technology Acceleration Fund for investment by the Arkansas Economic Development Commission, the Arkansas Science and Technology Authority, and the Arkansas Development Finance Authority to provide incentives to enhance the state’s economy through technology development. Another bill passed by lawmakers reduces the sales tax on manufacturers’ utilities from 3.875 percent to 3.125 percent.

Georgia
Funding for several Georgia Research Consortium projects is reduced in FY10 following the passage of the budget last week. Reductions to TBED initiatives in the conference committee bill approved by the General Assembly are, in some cases, less severe than the proposed cuts in Gov. Sonny Perdue’s executive budget (see the Jan. 28, 2009 issue of the Digest).

The Research Consortium is slated to receive $26.3 million in FY10, an increase of $3.6 million over the governor’s recommendation, but down $5.9 million from FY09. Funding for the Traditional Industries Program will be reduced by $1.5 million. Gov. Perdue’s budget would have eliminated $3.1 million from the program. Additionally, lawmakers restored $200,000 of the proposed $400,000 reduction for the Bio-Refinery.

Rather than reducing funds for specific programs within the Georgia Research Alliance (GRA), lawmakers included language in the conference committee report that allows for a discretionary reduction of $1.7 million in FY10.

The Advanced Technology Development Center (ATDC) is slated to receive $24.8 million in total funds, down from $30.9 million last year. This includes a reduction of $5 million from ATDC’s seed capital fund.

Lawmakers also restored partial funding to science, technology, engineering and mathematics (STEM) initiatives within the Department of Education. Slated for elimination in the executive budget, the Georgia Youth Science and Technology program, which offers educational programming that increases interest and enthusiasm in math and science, would receive $250,000 in FY10, the same as last year. Partial funding of $500,000 is restored in the conference committee report for the National Science Center and Foundation, which reflects a $250,000 reduction.

Two noteworthy bond issues approved in the budget include $10 million over five years to GRA to fund equipment for research and development infrastructure for science-based economic development, and $3 million over five years to fund science equipment and other technology to be matched by private funds at University System institutions statewide.

The conference committee report for HB 119 is available at: http://www.legis.state.ga.us/legis/2009_10/pdf/hb119.pdf

News of the reduction comes on top of additional proposed cuts to the commission in the current fiscal year. In February, Gov. Corzine called for additional 2009 budget cuts totaling $1.3 billion that included a reduction of $12.7 million for Commission on Science and Technology grants, and in January, the governor proposed a $13.7 million reduction for the New Jersey Stem Cell Research Institute.

The FY10 budget proposal would increase funding by $55.2 million for InvestNJ, an Economic Development Authority program created in 2008 to provide economic assistance to New Jersey’s business community. This program is composed of two parts - one designed to spur job creation and retain jobs in New Jersey, and the other to promote capital investment by expanding the sales and use tax credit for capital investments in the state.

Last week, Budget and Finance Officer David Rosen of the Office of Legislative Services presented news of a significant tax revenue drop to the Senate budget committee, reports Philly.com. The Office of Legislative Services projects that the state will bring in $606 million less in revenue than previously anticipated by the Corzine administration, according to the article. In February, the governor announced a projected shortfall of $2.8 billion by the end of the current fiscal year.

The FY10 executive budget is available at: http://www.nj.gov/treasury/omb/publications/10budget/index.shtml#budget.

Since 2004, South Dakota’s five research centers have had a $111 million impact on the state economy, according to new data released by the South Dakota Tourism and State Development’s Office of Commercialization. This impact represents a substantial return on investment for the state’s initial $3 million investment five years ago. The impact numbers are being released as the state concludes its funding for the original five centers and prepares to launch several new centers, which will be supported by the state through 2014.

The $111 million impact includes more than $77 million in research spending and the activities of the 12 companies that have expanded or launched as a result of the centers. The centers also have helped create 550 new jobs and eight patent applications.

Governor Mike Rounds led the effort to launch the current set of centers as part of his 2010 Initiative. The initiative set several goals for the state, including becoming a recognized center in research and technology. The five centers have helped the state’s research institutions and industry partners collaborate on biotechnology projects to improve the quality of research and to increase the state’s national reputation as a location for research. The 2010 Initiative also set a target of increasing the gross state product by $10 billion, a goal the state achieved last year.

Though the state will now turn its attention to the five new centers, the original centers are expected to continue their activities. Support will come from university departments and partnerships with private companies, including companies that spun out from the centers in previous years.

More information about South Dakota’s 2010 Initiative is available at: http://www.2010initiative.com/.

Asian countries grew to account for more than half of the total number of U.S. PhDs awarded to foreign students in 2003. Students from Germany, France, and Great Britain in that same year comprised less than 3 percent of the total PhDs awarded. Historically, students from China accounted for one percent of PhDs in engineering and the physical and life sciences from 1958-61 and 1969-71, but this cohort alone grew to 13 percent of the U.S. science PhDs awarded from 1994-96. Besides the growth of potential and interested students, the authors also found the flow of foreign students from year to year is impacted by changes in U.S. federal government investments for university research, the development of ethnic social networks, political transformations, and openness to trade.

However, the composition of foreign students at elite U.S. institutions differs from the general pool of foreign PhD students.

The authors examined the top five universities in several scientific disciplines and found Asian countries – notably Taiwan, South Korea, and China – are underrepresented in top PhD programs in the U.S. For example, while students from China represented 15.5 percent of all the awarded PhD degrees in chemistry from 1994 to 2003, Chinese students received only 5.3 percent of the PhD degrees at the nation’s top five chemistry programs.

Students from countries with more advanced PhD programs also come to the U.S., but are much more concentrated in these elite programs. While students from Canada represent about one percent of the total number of PhDs awarded in physics and biochemistry programs across the U.S., the percentage of degrees that go to Canadian students at elite programs jumps to three percent of the total.

The aggregated number of foreign PhD students has grown significantly over time. The authors’ assessment of science and engineering degrees, which excludes the social sciences, finds students from outside the U.S. accounted for 51 percent of PhD recipients in 2003, compared to only 27 percent of recipients in 1973. Furthermore, the number of doctorate degrees received by students from foreign countries now outnumbers the PhDs awarded to U.S. residents in the fields of engineering, the physical sciences, and economics. Only in the life sciences is this reversed.

From a policy perspective, one might expect as other nations’ PhD programs improve, the flow of international students in terms of the number and quality of students will change as well.

The working paper “Internationalization of U.S. Doctorate Education” is available at:

http://papers.nber.org/papers/W14792

NSF also surveys the 19 federal agencies that account for 99 percent of all federal R&D expenditures each year. The results are compiled in an annual statistical report on federal science and engineering obligations that presents tables characterizing the data a variety of ways: by agency, field of science and engineering, performer, geography, etc. NSF released the most recent online edition of the Federal S&E obligations series within the past two weeks. In the U.S., federal S&E obligations to universities and colleges were $28.5 billion in FY06, an increase of 17.4 percent from FY06.

SSTI has prepared a table tracking for each state the amount of obligations from FY02 to FY06, the percent change over this period, and the rank of this change. The eight states with the largest increases in federal obligations over the five years were all EPSCoR states, with South Dakota, Nevada, North Dakota, Delaware, and Hawaii leading the pack. For the 18 states with more than $500 million in obligations in FY06, all of them experienced an increase of at least 10 percent over the five years with the exception of Colorado and Florida, with increases of 7.7 percent and 6.2 percent, respectively. Two states, Maine and Alaska, witnessed a decrease over these five years.

Obligations v. Expenditures
NSF defines obligations as “the amounts for orders placed, contracts awarded, services received, and similar transactions during a given period, regardless of when the funds were appropriated and when future payment of money is required.” The information presented in this week’s table is based on obligations.

Expenditures, on the other hand, are actual outlays of money spent. That money may have been obligated to the institution during the same fiscal year, the previous year or several years earlier in the case of some three- and five-year grants. The expenditure may be a portion of a larger obligation or the entire obligation. It cannot be discerned from the aggregated data. Data presented in the March 25 and April 1 editions of the Digest were based on expenditures.

Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions: FY 2006 is available at: http://www.nsf.gov/statistics/nsf09310/?govDel=USNSF_178

SSTI's table presenting Federal S&E Obligations to Academia, by State FY2002-2006 is available at: http://www.ssti.org/Digest/Tables/041509t.htm

Penn State seeks a director for the newly formed Economic Engagement Initiatives unit in the Office of Economic and Workforce Development. The director will work collaboratively with academic, outreach, research, and other centers and units to present a unified point of entry to resources in support of economic development. The director is expected to generate significant grant-funded initiatives to Penn State. Qualifications include a master's degree (PhD preferred) or equivalent, plus five years of work-related experience in economic and workforce development or related fields that include evidence of organizational leadership and supervisory roles.