In This Week's Issue
SSTI News and Analysis
White House Seeking Input for 21st Century Global
The National Economic Council and the
Office of Science and Technology Policy (OSTP) are asking for
public input for a new initiative intended to address the
challenges of the 21st century. The initiative, which would be
similar to the National Academy of Engineering's (NAE) Grand
Challenges for Engineering program, would help catalyze
innovations to spur economic growth, encourage multidisciplinary
collaborations and improve STEM education. Responses are needed to
help identify specific challenges, potential partners and models
for the program.
President Obama originally announced that his administration would
launch the Grand Challenges Initiative in his National
Innovation Strategy, released last September (see the September 23,
2009 Digest). The strategy identified eight challenges
of national importance, where the market was considered unlikely to
produce optimal research and commercialization outcomes on its own.
These sectors include:
- Complete DNA sequencing of every case of cancer,
plus new anti-cancer medicine and therapeutics;
- Affordable solar cells and energy self-sufficient
- Lightweight vest that can stop armor-piercing
- Compelling educational software;
- Intelligent prosthetics;
- Biological systems that turn sunlight into
- An exascale supercomputer capable of next-generation
- Automatic, accurate and real-time translation
The White House currently is seeking public input on
four aspects of the initiative, including:
- Responses to the grand challenges included in the
President's innovation strategy;
- Other grand challenges that the the administration
- Partners that are interested in collaboration to
achieve the initiative's goals; and,
- Models for creating an "architecture of
participation" that allows many individuals and organizations to
contribute to efforts supported by the initiative.
The Administration says that it will work closely
with NAE's Grand
Challenges for Engineering, which began in 2008, and will be
holding a series of summits across the country this year addressing
its focus areas. As part of the initiative, NAE has created the
Scholars program, to prepare students to solve 21st century
engineering challenges. The program combines research
opportunities, multidisciplinary engineering curriculum,
entrepreneurship education, global collaborations and service
learning to improve student participation and success in vital
research. More than 25 U.S. universities are currently part of
The current solicitation from the administration
will help determine what form the new initiative will take.
Responses to the OSTP request for information are due by April 15,
Read OSTP's announcement at: http://www.whitehouse.gov/blog/2010/02/04/grand-challenges-21st-century.
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Michigan Gov Plans to Boost Entrepreneurship, Unveils FY11
A plan to provide loans and specialized training to foster
entrepreneurship recently was announced by Gov. Jennifer Granholm.
The two-pronged, $43 million strategy consists of a loan
partnership between credit unions and Michigan Small Business and
Technology Development Centers with specialized training provided
through the Michigan Economic Development
Corporation's FastTrac NewVenture Program.
The loan partnership is expected to make about $43 million
available to help more than 2,000 small businesses with new or
expanding operations. For the training component of the plan, the
Michigan Economic Development Corporation has pledged $200,000 to
expand the 10-week FastTrac NewVenture program, designed for
entrepreneurs in the early stages of business development, reports
the Associated Press.
Earlier this month, Gov. Granholm unveiled the FY11 executive
budget, which maintains level funding of $75 million for the
state's 21st Century Jobs Fund,
increases federal funding for the No Worker Left Behind Initiative,
and restores the Michigan Promise Scholarship program for higher
education as a tax credit. The $47.1 billion budget includes $7.9
billion in general fund spending, and recognizes more than $20
billion in federal revenues, according to the
The Michigan Strategic Fund is slated to receive $169 million in
FY11, which includes $75 million for the 21st Century
Jobs Fund (the same as the FY10 estimate). The fund supports job
creation in emerging fields such as renewable energy, life
sciences, homeland security, and advanced manufacturing by
investing in basic research at universities and providing access to
Within the Department of Energy, Labor and Economic Growth, the
governor recommends $648 million in all funds, an increase of $35
million, to provide education and training to upgrade
workers' skills in healthcare, advanced
manufacturing, and alternative energy fields, including the No
Worker Left Behind Initiative. The initiative, which was supported
by both general and federal funds in previous years, would receive
no general fund support in the upcoming year.
To restore funding for the Michigan Promise Scholarship grants
eliminated in the current year budget
the governor recommends restructuring the
program as an income tax credit. Under the plan, the Michigan
Promise program would be converted to a new refundable $4,000 tax
credit available to students who graduate from Michigan colleges
and continue to work in the state for one year. Funding for the
Agriculture Experiment Station and Cooperative Extension Service is
maintained at current funding levels: $34.2 million and $29.5
While the state currently operates on an annual budget, Gov.
Granholm proposed reforms to institute a two-year budget for the
state beginning in FY12 and requiring a June 30 deadline for
completion of all legislative action on the budget. The
state's current fiscal year ends Sept. 30. The
proposed reforms also would require the passage of all legislation
needed to implement the budget by the June 30 deadline and would
require a two-year sunset for all tax expenditure credits.
The FY11 executive budget documents and bills are available at:
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Virginia Jobs Plan Advances; $50M Econ. Dev. Increase
Nearly all components of a comprehensive legislative package set
forth by Gov. Bob McDonnell that would provide tax credits for
green jobs, invest in renewable energy R&D, and support the
biotechnology and life sciences industries have passed at least one
chamber in the legislature at this point. The governor also
introduced amendments to the 2010-12 budget proposed by former Gov.
Tim Kaine that would provide an additional $50 million for economic
The "Jobs and Opportunity Agenda"
was announced during the governor's first weeks
in office and focuses on job creation and tax incentives to grow
the state's economy. Last week, the
governor's office announced that 30 of the 34
measures within the package received legislative approval.
Highlights of the legislation as it relates to tech-based economic
development are listed below:
803 Creates a $500 income tax credit for
each green job created (up to 350).
677 Establishes the Specialized
Biotechnology Research Performance Grant Program for nonprofit
entities engaged in research, development, and production related
to molecular diagnostics and drug development that enter into a
performance-based memorandum of understanding with the
523 Grants an income tax exemption on
capital gains for qualified investments in technology and science
928 Creates the Virginia Universities
Clean Energy Development and Economic Stimulus Foundation to
identify and administer funding for R&D of alternative fuels
and clean energy production.
measure requiring 20 percent of any revenues and royalties from
offshore natural gas and oil drilling to be invested in renewable
energy R&D passed both chambers of the legislature and is
awaiting the governor's signature.
Last week, Gov. McDonnell presented amendments to the 2010-12
budget proposed by former Gov. Kaine in December, and although many
of the governor's proposals call for spending
reductions, an additional $50 million is proposed for economic
development and recruitment initiatives. This includes:
- $12.1 million in additional funding for the
Governor's Development Opportunity Fund to
recruit and retain businesses;
- $8.5 million to increase Virginia Jobs Investment, Virginia
Small Business Finance Authority's Loan
Guarantee, and Business One-Stop programs;
- $3 million to establish a competitive grant program to assist
localities in developing wet lab space for biotechnology companies;
- $2 million to establish state economic development offices
through the Virginia Economic Development Partnership in China,
India and the United Kingdom.
Funding for the Eminent Scholars program, which attracts and retains eminent scholars at
Virginia's colleges and universities, would be eliminated in
the governor's proposal ($6.8 million
Gov. McDonnell's proposed amendments to the
2010-12 budget are available at: http://www.governor.virginia.gov/docs/10-02-17_Gov_Recs.pdf/.
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Minnesota Gov Wants Tax Credits for Angels and Research
Gov. Tim Pawlenty recently unveiled his 2010 supplemental budget
recommendations, which includes new tax incentives to boost job
creation and spending cuts across state agencies to help eliminate
a projected $1.2 billion deficit. Announced during his
State of the State Address earlier this month, the proposed
Jobs Creation Bill is a six-part plan with components aimed at
stimulating formation of early-stage capital in new emerging
businesses and encouraging businesses to invest in R&D.
Under the proposal, a 25 percent tax credit for angel
investments in qualified businesses would be established. The tax
credits would be capped at $5 million a year in 2010 and $10
million in 2011, according to budget documents. Angel tax
incentives are likely to be a topic of debate during the upcoming
legislative session with competing bills introduced in both the
House and Senate (Read
Gov. Pawlenty's jobs bill also aims to
encourage businesses to undertake R&D by eliminating the
current cap for corporations which currently
is 5 percent for R&D investments up to $2.5 million
and to expand the credit to all businesses
that invest in R&D.
Another part of the jobs plan would create a program modeled
after the certified capital company programs (CAPCO), but the
general fund impact would not begin until 2014. Under the proposal,
a $100 million capital pool would be created for investing in
small, emerging green businesses with the program providing an 80
percent tax credit for companies investing in small businesses.
Lawmakers rejected a similar proposal by the governor last year
that would provide $50 million in investment tax credits for CAPCOs
(see the July 15,
2009 issue of the Digest).
State agencies and other programs would be reduced by $181
million within the supplemental budget proposal, with additional
cuts to higher education institutions. Lawmakers passed the 2009-11
spending plan in May; however, Gov. Pawlenty used executive
authority to reduce the approved budget in order to fill what was
then a projected $2.7 billion deficit.
The governor's $815 million capital budget
includes $80 million for a new physics and nanotechnology building
at the University of Minnesota to house research laboratories.
The governor's 2010 supplemental budget is
available at: http://www.mmb.state.mn.us/doc/budget/bud-op/op10/supp10.pdf.
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Floridians Still Waiting for Bio Investments to Pay
Florida's efforts to boost it's biotechnology sector may not be
paying off as quickly as originally hoped. A recent report finds
that the $449 million invested through the Innovation Incentive
Program has yet to result in industry growth in counties where the
program's grantees have their facilities. The report, published by
the Florida Office of Program Policy Analysis and Government
Accountability (OPPAGA), suggests that the state's lack of
early-stage capital for biotech startups may be contributing to the
sluggish pace of development.
Florida's Innovation Incentive Program (IIP) was introduced in 2006
to attract high-value research and help bioscience companies
expand. Previously, the state had appropriated $310 million to help
create the Scripps Florida Research Institute. IIP was appropriated
$200 million in FY07 and $250 million in FY08 to continue providing incentives to major research institutions. Using
the IIP funds, the state was able to attract seven other research
institutions, including the Burnham Institute for Medical research,
the Max Planck Florida Corporation, the Miami Institute for Human
Genomics, the Vaccine & Gene Therapy Institute Florida, Torrey
Pines Institute for Molecular Studies, SRI International and the
Charles Stark Draper Laboratory.
The OPPAGA report concludes that despite the strong
collaborative relationships established between universities and
IIP grantees, the $449 million invested through the program has not
led to substantial growth within the state's biotechnology
clusters. Though university collaborations could feasibly lead to
new companies in the future, few biotech companies have been
launched in grantee counties since the beginning of the
The report finds that the IIP efforts have succeeded
in one of its key goals. The jobs that have been created within the
research institutes pay wages that are significantly higher than
average for the state. It is less clear if the initiative has led
to the creation of new jobs, however. Using data collected in the
report, OPPAGA will begin tracking the growth of biotechnology
employment within the counties with grantees.
In order to capitalize on the investments that have
been made already, the report recommends addressing the lack of
early-stage capital available to early-stage biotech companies.
OPPAGA suggests shifting the focus of the IIP effort to provide
direct grants to startup companies. The report also recommends
matching grants for SBIR recipients in the state.
The report, "Biotechnology Clusters Developing
Slowly; Startup Assistance May Encourage Growth", is available
The OPPAGA findings come after the state's
leadership recommended staying the course, however. Governor
Charlie Crist's proposed FY11 budget includes $100 million for the
IIP fund and $50 million split between two university research
programs. Only $15 million would be appropriated for the Florida
Institute for Commercialization of Public Research (see the
The private sector is stepping up its efforts to support
commercialization. Two Florida organizations currently are planning
to increase their efforts to provide assistance and capital to the
state's life sciences industry. BioFlorida, a trade association,
recently announced plans to create a new nonprofit foundation to
improve statewide science education, support bioscience research
and assist entrepreneurs. The BioFlorida Institute will expand the
association's previous career and education program for high school
students and offer an industry resource center. BioFlorida plans to
use the institute to connect early-stage companies with suppliers,
partners and service providers in Florida, as well as other
assistance for bioscience entrepreneurs. Read more about the
BioFlorida Institute at: http://bioflorida.com/web/module/press/pressid/258/interior.asp.
The Florida Opportunity Fund, the state's fund-of-funds
initiative, recently announced that it would invest in a venture
firm specializing in the biotech industry. The fund will invest in
Silicon Valley's 5AM Ventures, which specializes in early-stage
life science investments, and has expressed an interest in
additional investments in companies associated with the Scripps
Research Institute and the Burnham Institute. Florida First
Partners, manager of the fund, noted that 5AM Ventures was chosen
because of its potential value to the state's biotechnology sector. Read more about the Florida Opportunity Fund
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Should State R&D Funding Be Surveyed Annually?
Academic, industrial and federal R&D spending is surveyed
annually by the National Science Foundation (NSF). Similar
information regarding state R&D investments, however, only is
captured periodically. The latest survey results, for fiscal years
2006 and 2007 were released this past
December and used to create an SSTI Useful Stats table
on state R&D intensity (see the Dec. 9, 2009
Digest). Is this information useful for state
and local TBED practitioners and policy makers? Should
NSF and the Census Bureau, which conducts the survey for NSF,
continue the effort?
The Census Bureau has asked OMB for reinstatement of the
collection of state R&D expenditures. The Bureau requests public
comments and recommendations, within 30 days, as to whether or not
the survey in its present form is useful to its primary target
Digest readers interested in commenting are encouraged to see
the brief notice provided in the Feb. 19 Federal Register
for more background and comment instructions: http://www.gpo.gov/fdsys/pkg/FR-2010-02-19/html/2010-3155.htm.
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How Best Can Incubator Managers Help Tech Companies?
Being located within an incubator can provide tech startups help
beyond low-rent space. Networking opportunities and direct
counseling and technical assistance can play important roles toward
the firms' success. Or do they? A recent study
published in the journal Technovation finds the interactions
incubator managers have with their tenant firms may not be as
helpful as the metrics would suggest.
Most incubators use a variety of measures for interactions with
tenants as indicators of their contribution to the
companies' success. Increasing the number of
hours counseled, number of meetings held, types of assistance
provided, etc., generally would suggest more value to the company.
Joanne Scillitoe and Alok Chakrabarti, the authors of The Role
of Incubator Interactions in Assisting New Ventures, say not so
Scillitoe and Charabarti surveyed U.S. and Finnish young
technology firms affiliated with business incubators to determine
the role of both counseling and networking activities on the types
of assistance firms received. The results suggest the amount of
personal counseling by incubator management impacts new tech
firms' business knowledge, but not their
technical knowledge. Alternatively, the amount of new networking
contacts offered by incubator management has an impact on
firms' technical knowledge, but not their
business knowledge. As a result, the staff of business incubators
may need to tailor their assistance depending on the specific needs
of their incubating companies.
For example, the authors found the number of times personal
counseling was provided by incubator staff was aligned with tech
firms' developing business knowledge, defined by
the extent a firm learns about buyer preferences in the market.
This same measure of personal counseling by incubator staff,
however, was not connected to the advancement of technical
knowledge, defined by learning about trade secrets, sourcing
technology, and integrating new technologies.
Alternatively, this same measurement of technical knowledge
growth was linked to the networking opportunities, specifically the
number of new contacts presented to firms by incubator staff. In
addition, the number of new contacts provided was not shown to
influence the business knowledge of tech firms.
The authors' model found the location of the
firm, whether in the U.S. or Finland, had no impact on advancing
firms' technical or business knowledge.
Similarly, the number of employees within the incubating firms had
no impact on the development of knowledge.
The research suggests the best way for the managing staff of
business incubators to help their tech companies is dependent on
identifying their companies' needs and providing
specific services. In this study, networking helped more with
technical knowledge, and counseling provided more business
knowledge. While incubator staff is often concerned with marketing
firms and filling incubator space, incubators that provide
tailored assistance to firms may have a greater impact on the
economic growth of their community.
Additionally, tech firms in general business incubators
as opposed to incubators specifically tailored
to technology startups likely were to spend
considerable time educating the incubator managers about the
companies' technologies and the different needs
of tech startups compared to retail/service businesses. The
direction of the information flow and knowledge gained was reversed
as the incubator manager needed to come up to speed before being
able to find or offer the appropriate technical assistance.
From the perspective of a young technology-based firm looking
for a location, business incubators tailored to science and
technology needs and with strengths in counseling and networking
opportunities likely may be able to help the company succeed.
"The Role of Incubator Interactions in
Assisting New Ventures" can be accessed at: http://linkinghub.elsevier.com/retrieve/pii/S0166497209001734.
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Change in Health & Human Services R&D, by State
Increasing life science and health-related research remains a major
component of many state, local and university TBED strategies.
Change in federal R&D obligations from the Department of Health
and Human Services (HHS), which includes the National Institutes of
Health, the Centers for Disease Control & Prevention, and
Agency for Healthcare Research and Quality among other agencies,
could be a good indicator of progress or an
indicator of the need to expand or amend those strategies. This
week's Useful Stats column presents five-year
data on changes in HHS R&D obligations by state.
While the NIH budget was doubling in the early part of the last
decade, most states saw life science research spending rise.
Flatter federal R&D budgets, though, mean more competition for
funding. The FY11 Federal Budget released recently by the Obama
Administration requests a slight uptick for HHS research, but only
priority areas would receive increases that keep pace with
inflation. That, coupled with the large spike in R&D grants
distributed by NIH as a result of ARRA, could signal competition to
maintain local research momentum would grow even more in the coming
Aggregate HHS R&D spending still increased in the study
period 2002-2006, but the state by state analysis in
SSTI's table paints a picture that includes more
disparity in performance and dependence on HHS funding from year to
year as well as across the five years.
For the U.S. as a whole in 2006, HHS R&D obligations were
$28.4 billion, a small ($18 million) decrease from the previous
fiscal year but 19 percent higher than 2002. As a percentage of the
nation's entire R&D portfolio,
HHS's share fell to 26.4 percent in 2006, from a
peak of 28.7 percent of all federal R&D in 2003. This marks the
third year in a row that HHS's share of total
federal R&D obligations has declined.
As the home to HHS divisions such as the National Institutes of
Health (NIH) and the U.S. Food and Drug Administration (FDA),
Maryland led the country with $7.20 billion in HHS R&D funding
in 2006, just over one-quarter of all HHS R&D obligations. The
state also enjoyed the greatest five-year percentage increase in
HHS obligations at a whopping 276.1 percent.
The second greatest five-year increase in HHS obligations was
experienced by West Virginia at 37.4 percent. Total HHS R&D
obligations for West Virginia in 2006, however, were only 0.6
percent of Maryland's total that year.
More than 30 states experienced declines in the percent change
between 2002 and 2006, but individual year snapshots can be
misleading. Because of the significant variability in the flow of
HHS obligations by state each year, trend lines across the years
may be more telling. SSTI's table presents the
total R&D obligations for each year and the percent change from
the previous year as well as the five-year figure. The table is
available at: http://www.ssti.org/Digest/Tables/021710t.htm
The original data for each state, including the R&D
breakouts for every agency in addition to HHS, can be found at the
NSF's Federal Funds for Research and Development series.
They can be accessed at: http://www.nsf.gov/statistics/fedfunds/.
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Eight States to Share $357M for Broadband
Grants totaling $357 million recently were awarded in
California, Florida, Indiana, Louisiana, New York, Pennsylvania,
West Virginia and Wisconsin to bring high-speed Internet access to
households and businesses. The
American Recovery and Reinvestment Act grants aim to bridge the
technological divide, boost economic growth, and create jobs across
States' Regression During the Recession
interactive map provides a glimpse into the economic indicators
of each state's economy over the past year. The
map ranks and compares states impacted by the recession showing job
growth, income growth, wage growth, home value growth, construction
growth and unemployment.
Quebec Fast Tracking Citizenship for Skilled Labor
Quebec's Premier Jean Charest told a group
at the University of Mumbai that students who obtain a bachelor's,
master's, or doctoral degree from any Quebec university would
obtain a certificate of selection putting them on a fast track to
Scholarships and Internships for Women in Science and Engineering
Stony Brook University and Brookhaven National Laboratory announced scholarships of up to $3,500 for students enrolled in the Women in Science and Engineering program and four internships at the national lab to help students gain research experience.
Barbie is Newest Ambassador for Women Engineers
Meanwhile, if Barbie were real, she could benefit from such a program as consumers across the world voted to select "computer engineer" as Barbie's next career.
Computer Engineer Barbie hopes to inspire a new generation of
girls to explore this important high-tech industry.
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