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SSTI Weekly Digest for the Week of November 19, 2008 In the November 19, 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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TIP-MEP Host Regional Meeting on Dec 9 in Atlanta
On December 9, two NIST programs will be hosting a meeting to explain how businesses can better take advantage of them. Officials from the Technology Innovation Program (TIP) and the Manufacturing Extension Partnership (MEP) will provide an overview and discuss future directions for the programs. SSTI is co-hosting the meeting because we see it as an excellent opportunity for TBED organizations and their clients to learn more about and provide input on programs that could see dramatic increases in funding in an Obama administration.

The meeting will explore important topics, including: funding opportunities for businesses and joint ventures through TIP, explaining what "areas of critical national need" are and how companies and TBED groups can contribute, and exploring the Next Generation MEP including growth services, technology acceleration, supplier development, and sustainability.

The meeting is being held at the Atlanta Marriott Marquis Hotel. There is no fee to attend, but participants are asked to register at: http://www.ssti.org/tipreg/tipreg.htm A limited number of rooms are available at $141/night plus tax and can be reserved by calling 1-800-228-9290 or 404-521-0000. Ask for the SSTI room block.

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Governor Outlines $12M Economic Stimulus Plan for Colorado
Gov. Bill Ritter announced his administration’s plan to inject $12 million into initiatives that promote job training, provide small businesses with access to capital, and invest in the state’s New Energy Economy and bioscience sectors.

The proposals were outlined as part of the governor’s fiscal year 2009-10 budget recommendations earlier this month, which includes nearly $5 million for economic development initiatives in the upcoming fiscal year and another $7 million contingent upon budget reserves in 2010.

From the 2009-10 General Fund, the governor recommends $4.9 million for economic development incentives divided among three priorities:
  • Helping small businesses gain access to capital and creating education and outreach programs to improve the availability of credit to small businesses;
  • Establishing job training programs at community colleges in the areas of renewable energy and energy efficiency. This proposal would use the existing structure of Colorado FIRST, a workforce development program that focuses on science and technology; and
  • Renewable energy economic activities within the Governor’s Energy Office.
The remaining $7 million will be held in reserve until the end of the fiscal year in 2010. In addition to the above-mentioned priorities, the governor’s office will consider increased investments in the state’s Clean Energy Fund and new infrastructure and commercialization projects under the Bioscience Discovery Evaluation Grant Program. Gov. Ritter’s budget proposal calls for a total $77 million to be deposited into the reserve fund, which will become available on June 30, 2010, if economic conditions allow.

The FY09 budget recommendation includes an additional $40 million for higher education, a 5 percent increase over the FY08 appropriation.

View Gov. Ritter’s FY 2009-10 budget request at: http://www.colorado.gov/cs/Satellite?c=Page&cid=1225731668405&pagename=OSPB%2FGOVRLayout&rendermode=preview

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SSTI Analysis
2008 State New Economy Index Paints New Path for TBED Policies
While which states top the list in the 2008 edition of the State New Economy Index will capture the attention of the media and therefore the majority of decision makers, the most important contribution of the 2008 Index in the current fiscal environment is its overview and final chapter. The Index, released Nov. 18 by the Information Technology and Innovation Foundation and the Kauffman Foundation, goes beneath and well beyond the results of the 29 indicators to explain the need for fundamental change to how states and regions approach economic development. The final chapter goes a step farther and identifies key strategic shifts required to address the challenges of the New Economy.

As state budgets reel from the fallout of the financial crisis, the authors warn:  “If states are going to meet the economic challenges of the future, they will need to make the promotion of innovation a larger part of their economic development policy framework.”  

Based on the report, state legislators would seem well advised to avoid deep budgets cuts affecting those areas required to support and encourage innovation – the fundamental elements of tech-based economic development.

The Index does not mean, however, that the status quo should be maintained for most state economic development strategies – particularly given the current fiscal malaise. That applies as well to current TBED approaches before we get too smug. Innovation within state ED portfolios – in many cases seismic shifts and unconventional thinking – are also necessary, the authors point out.
“All states and most regions no longer can rely solely on old economic strategies of relentlessly driving down costs and providing large incentives to attract locationally mobile plants or branch offices…Rather regions must look for competitive advantage in earlier-stage product and service cycle activities.”

“In short, regions need to be places where existing firms can become more productive and innovative, where new firms can emerge and thrive, and where locationally mobile establishments want to locate because of the innovation environment.”
To accomplish this, the final chapter of the Index is dedicated to explaining briefly the four current paradigms for approaching state and regional economic development before outlining more than a dozen specific strategies for states to adopt:

Invest in Innovation
  • Use targeted investments in knowledge infrastructure as an incentive
  • Support statewide broadband promotion organizations
Help Companies to Be More Innovative
  • Create a statewide commercialization and entrepreneurship organization
  • Catalyze and empower industry clusters
  • Use Web 2.0 tools to support open innovation
Use Tax Policy to Spur Innovation
  • Extend sales tax parity for manufacturing purchases of computers and IT equipment
  • Align state R&D tax credits with the new federal R&D tax credit
Facilitate Entrepreneurship
  • Provide digital tools that make it easy to start a new business
  • Benchmark state procedures for starting a business
  • Support angel capital networks
  • Link together the array of information resources for entrepreneurs
  • Expand entrepreneurship training
Cultivate Institutional Innovation
  • Create different and better K-12 schools
  • Shift the focus of post-secondary education more toward acquiring skills
  • Take industry-university partnerships to new levels
“Success in the New Economy requires that a whole array of institutions—universities, school boards, firms, local governments, economic development agencies—work in new and often-uncomfortable ways. At the end of the day, this is a challenge of leadership,” the Index concludes.  

The 2008 State New Economy Index is available at: http://www.itif.org/index.php?id=200 or http://www.kauffman.org/Details.aspx?id=5812.

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Arkansas Task Force Recommends State Investments in Tech Companies, Co-locating Economic Development Agencies
To attract and grow high technology businesses and streamline its economic development efforts, a task force created in 2007 to study economic competitiveness in Arkansas recommends the state remove its constitutional prohibition on state equity investments in private companies and co-locate its three economic development agencies.

The final report of the Task Force for the 21st Century released its recommendations to Gov. Mike Beebe and the legislature last month, which complement the 2008 Accelerate Arkansas strategic plan.

Pointing to neighboring state Oklahoma, which recently elected to use equity investment as a tool to provide seed capital for tech-based firms, the report cites examples of how removing the state’s constitutional restraints can provide the state a more active role in economic development and generate significant economic returns, specifically in attracting and retaining high-wage jobs.  
 
The task force also responded to the organizational structure necessary for an efficient and effective 21st century state economic development system. While they do not recommend consolidating economic development functions at this time, they suggest housing the state’s three primary economic development agencies – the Arkansas Development Finance Authority, the Arkansas Economic Development Commission, and the Arkansas Science and Technology Authority – within one location.  Additionally, the state should create an economic development plan that has input from and involves all of these agencies, the task force finds.

Gov. Beebe unveiled his fiscal year 2009-11 budget recommendations last week, which includes $9.6 million in FY09-10 and $9.4 million in FY10-11 for the Arkansas Science and Technology Authority – slightly below the base level funding of $9.7 million and $9.8 million, respectively. The governor recommends base level funding of $1.9 million each year for the Seed Capital Investment program, which provides up to $500,000 in capitalization for tech-based companies. This was one of several TBED initiatives to receive additional funds in the last biennium (see the April 9, 2007 issue of the Digest). Gov. Beebe also recommended base level funding of $257,182 each year for the Arkansas Manufacturing Extension Network.

The governor included $2 million in 2009-10 for Research Development Program Grants within the higher education budget – up from $1 million in 2007-08. This program provides funding to institutions of higher education for development of scientific research.

Although the governor presented funding recommendations for the next two years, the legislature is required to return in 2010 to vote on the budget in accordance with the recently approved voter referendum that requires annual legislative sessions for budget approval (see the Nov. 5, 2008) issue of the Digest).

The FY 2009-11 biennial budget recommendations is available at: http://www.state.ar.us/dfa/budget/2009-2011BiennialBudgetManuals.html.

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Communities Around the World Celebrate First Global Entrepreneurship Week
This week an estimated five million people will celebrate the first annual Global Entrepreneurship Week by taking part in one of the 13,000 events planned worldwide. Founded by the United Kingdom's Mark Your Mark campaign and the U.S.-based Ewing Marion Kauffman Foundation, Global Entrepreneurship Week is designed to foster innovation and ambition in people under 30 to encourage them to participate in the innovation economy and start new businesses. The initiative has found support from several high-profile world leaders like U.K. Prime Minister Gordon Brown, French President Nicholas Sarkozy, Singaporean President S.R. Nation, California Governor Arnold Schwarzenegger and Sir Richard Branson, founder of the Virgin Group.

Organizations in 77 countries and all 50 states will participate in entrepreneurship-related activities this week including entrepreneurship challenges, student business innovation tournaments, and special networking opportunities. In the U.S., more than 880 different events are taking place.

One of the most active U.S. partners, the Launch Pad at University of Miami in Coral Gables, FL will feature activities all week. Session include presentations on university commercialization, social entrepreneurship and Florida's entrepreneurial outlook. Launch Pad is also offering a prize to the person who attends the most Global Entrepreneurship Week events.

A directory of U.S. activities is available at: http://unleashingideas.org/country/US/activities

On Friday, November 21 at 9:45am, the New York Stock Exchange will host a panel discussion featuring celebrity entrepreneurs Russell Simmons, founder of Def Jam Records and Rush Philanthropic Arts Foundation, and Linda McMahon, CEO of the World Wrestling Federation, talking about how they got their start and what challenges budding entrepreneurs can expect along the road to starting a successful business. The event is intended to give young people a glimpse at the challenges and rewards of starting your own business and will allow audience members to ask questions about the process. The event will be webcast at: http://www.unleashingideas.org/mentoringmadness

Many organizations and communities are participating in the week's Speednetwork the Globe initiative to connect innovative people and to spark conversations about entrepreneurship. These events take a "speed-dating" approach to networking by getting people to talk for five or ten minutes at a time about their ideas and goals. By including both young people and those already involved in the innovation economy, these events can lead to future mentorships or other meaningful collaborations.

The Kauffman Foundation has more information and updates about U.S. events, including summaries of the day's activities, at: http://www.kauffman.org/entrepreneurship/international-celebration-of-entrepreneurship.aspx

Find out more about Global Entrepreneurship Week at: http://www.unleashingideas.org/

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Supercomputing Centers Take Steps to Expand National Research Capacity
Earlier this year, the Council on Competitiveness released a report on the nature and extent of high-performance computing in the private sector. This investigation, conducted by the council's High Performance Computing (HPC) initiative, found that while international best-in-class firms often make use of high-performance systems to solve complex problems, leading U.S. firms and their suppliers underuse these resources. It would greatly benefit the U.S. innovation economy to expand cooperation between private sector firms and supercomputing centers, according to the report.

Several supercomputing centers have recently taken steps to expand access to their computing power. University of Southern California's Information Sciences Institute recently received a contract to inform defense manufacturers about the opportunities provided by modern supercomputing resources. The $3.6 million contract will help expand training and outreach programs, as well as fund specific pilot programs to design computing solutions for the specific needs of defense manufacturers.

USC will collaborate with the Ohio Supercomputer Center (OSC) on the project through OSC's Blue Collar Computing initiative. OSC will provide defense manufacturers with real-time modeling solutions. Since 2004, OSC's initiative has offered assistance to the state's businesses by informing them about the possibilities of supercomputing.

In addition to providing access to its systems, the Blue Collar Computing program conducts outreach to industries that could benefit from supercomputing, even though many firms might not be aware of the solutions HPC can provide. The center works with firms to help them become familiar with advanced techniques for product development, design and manufacturing. Recently, the center has collaborated with PolymerOhio to reach out to the state's polymer industry and make the results of polymer research more easily available.

Oak Ridge National Laboratory (ORNL) has reached a milestone in its four-year effort to upgrade its supercomputing capabilies for unclassified research. After some recent upgrades, the laboratory's Cray XT Jaguar is now the world's fastest supercomputer for unclassified research. The achievement was be confirmed on Tuesday when the biannual TOP500 ranking of supercomputing systems was released. The Department of Energy's Office of Science makes the system available to academia, industry and government agencies to solve the most complex computational problems. ORNL Director Thom Mason believes that by having a system dedicated to open, high-impact scientific research, the lab will be able to take the lead in addressing pressing scientific problems in alternative energy research and climate change. 

More information about the Council on Competitiveness's Compete 2.0 and High-Performance Computing Initiative is available at: http://www.compete.org/about-us/initiatives/hpc/.

Find out more about Blue Collar Computing at: http://www.osc.edu/bluecollarcomputing/.

Learn more about the new system at: http://www.ornl.gov/info/press_releases/get_press_release.cfm?ReleaseNumber=mr20081117-00

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