In This Week's Issue
SSTI News and Analysis
Race for the Renewable Energy Pay-Off: Recent State
Actions
Over the past few months, several states have announced efforts
aimed at reducing the nation's dependence on
oil. While the importance and urgency of such efforts is perhaps
magnified in the wake of one of the worst U.S. environmental disasters,
the shift to a renewable energy-focused economy also brings with it
the expectation of job creation, new product development, and
increased revenue for states struggling in the aftermath of the
Great Recession.
Governors in Arizona and Rhode Island recently signed
legislation supporting renewable energy R&D and offshore wind
development, respectively. In California, a measure requiring
electric utilities to generate one-third of the
state's power from renewable sources is being
floated, and in Utah, Gov. Gary Herbert announced a formal planning
process to create a 10-year clean energy initiative for the
state.
Arizona
Gov. Jan Brewer recently signed into law HB
2370 establishing individual and corporate income tax credits
for R&D, production and delivery system costs associated with
solar liquid fuels. The measure, which is in effect from 2011 to
2026, specifies that qualified research includes only research
conducted in the state.
Solar liquid fuel refers to the process by which concentrated
solar energy is used in conjunction with carbon dioxide and water
to create hydrocarbons, according to an Arizona State University
press release. It is used to create combustible fuels such as
methanol and ethanol and additional processing potentially can
yield more traditional fuels such as gasoline, diesel and jet fuel.
California
A bill making its way through the Committee on Natural Resources
in the California legislature would increase the
state's renewable portfolio standard to require
utility companies to procure at least 33 percent of electricity
from renewable sources by 2020. Although this standard already is
in place following an executive order issued last September by Gov.
Arnold Schwarzenegger, future governors are not bound to the
standard (see the March 17,
2010 issue of the Digest). Gov. Schwarzenegger supports
the proposed bill (SB 722).
At the same time, an effort is underway to suspend the
state's Global Warming Solutions Act, which set
the 2020 greenhouse gas emissions reduction goal into law. Enacted
in 2006, the law directs the California Air Resources Board to
develop actions to reduce greenhouse gasses and prepare a scoping
plan to identify how best to reach the 2020 limit. Reduction
measures to meet the 2020 target date would be adopted at the start
of 2011.
The measure
to suspend the Act qualified for the November ballot last week. If
passed, the state would be required to abandon implementation of
the program until the unemployment rate drops to 5.5 percent or
less for four consecutive quarters. Backers of the initiative say
implementing the mandates now will result in increases in certain
consumer goods during a time of high unemployment.
Rhode Island
Legislation to facilitate construction of an offshore wind
project seen as key to Rhode Island's economic
development and renewable energy agenda was signed into law earlier
this month by Gov. Donald Carcieri. The legislation (H8083/S2819)
"clarifies the General
Assembly's original intent to encourage and
promote clean, independent, renewable energy in Rhode Island
through a demonstration sized, offshore wind project,"
according to the governor's press release.
Specifically, the legislation directs the Rhode Island Public
Utilities Commission to revisit the contract between wind farm
developer Deepwater Wind and National Grid that it rejected in
April, reports Providence Business News. The commission must
render a decision within 45 days. Deepwater also is required to pay
for a consultant to study any economic benefits of a wind farm, the
article reports.
The Block Island Project, which is expected to cost about $200
million, would present economic advantages for the state such as
attracting jobs and investment dollars of offshore wind turbine
manufacturers, blade manufacturers and related businesses,
according to the governor's office. Read the
press
release.
Utah
Gov. Gary Herbert announced earlier this month the formation of
a working group to develop a 10-year clean energy plan for the
state, an initiative outlined during his
State of the State Address. The plan, which is due
by the end of the year, will focus on creating energy-related
manufacturing jobs, developing cutting-edge technologies that
combine traditional fuels with renewables, modernizing
infrastructure, promoting energy efficiency, and enhancing
partnerships between industry, universities, governments and
communities to address energy opportunities. Gov. Herbert also
asked the advisory group to consider how the state can best deal
with nuclear issues, including the generation of power and disposal
of waste.
The governor tasked the group with accomplishing the goals
without the use of tax incentives, according to an Associated
Press article. An outline of the initiatives and objectives is
available at:
http://www.utah.gov/governor/docs/Energy-Initiatives-Imperatives.pdf.
return to the top of the page
$29.5 Million in NYSTAR Budget Extends Matching Grants
Program
The $68.2 million FY 11 budget approved last week for the New
York State Foundation for Science, Technology and Innovation
(NYSTAR), allows the foundation to continue to provide 10 percent
matching funds for research institutions and businesses in order to
attract federal, private and industry funds. The budget allocates
$29.5 million in FY11 for a matching grants program started with
ARRA stimulus funding and $5.2 million for the
state's six Centers of Excellence.
The appropriation is scaled down from Gov. David
Paterson's original budget recommendation that
would have provided $100 million for the program (see the issue of
the Jan. 27,
2010 issue of the Digest). The NYSTAR budget also
includes $1.5 million for state matching funds for the
Manufacturing Extension Program and $343,000 for the Research
Development Program.
A. 9705, providing the budget detail, is available at: http://public.leginfo.state.ny.us.
return to the top of the page
Illinois Approves Angel Investment Credit, Extends R&D
Credit
Illinois Gov. Pat Quinn recently signed legislation approving a
new tax credit to encourage angel investment and extending the
state's R&D tax credit one more year. The
Innovation Development and Economy Act (SB 2093) allows
eligible angel and early-stage institutional investors to take a 25
percent tax credit on investments in small, technology firms. Up to
$2 million may be claimed on an individual investment for a
$500,000 tax credit. The program is capped at $10 million and will
be effective on Jan 1, 2011.
Passed unanimously by the Illinois General Assembly, SB
3655 extends the state's R&D tax credit for
one more year. The provision allows for a tax credit equal to 6.5
percent of qualifying expenditures that increase R&D activities
in Illinois. These expenditures include, for example,
technological and experimental research whose purpose is to develop
new or improved components, functions, performance, reliability or
quality.
SB 2093 is available at: http://ilga.gov/legislation/publicacts/96/PDF/096-0939.pdf.
SB 3655 is available at: http://ilga.gov/legislation/publicacts/96/PDF/096-0937.pdf.
return to the top of the page
SC Changes Endowed Chairs Program &
Manufacturing Incentives
Touted as a tool to help the state attract and retain jobs,
South Carolina Gov. Mark Sanford last week signed into law H. 4478,
the Economic Development Competitiveness Act. The new law directs
one-third of the state's endowed chairs money be administered by the Coordinating Council on Economic Development
— a reform measure that the governor says will
help shift its focus to job creation and allow private sector
investment to lead public sector investment. Funding previously was
administered by an academic panel. The Act also provides several
incentives for manufacturing, including renewable energy tax
incentives.
To support the state's manufacturers and
attract new facilities, the Act includes the following
incentives:
- A renewable energy facility tax credit equal to 10 percent of
the cost of a company's qualifying investments
in plant and equipment for renewable energy operations;
- An amendment changing the South Carolina Life Sciences Act to make it the South Carolina Life Sciences Act
and Renewable Energy Manufacturing Act, extending benefits to
renewable energy manufacturing facilities, including tax credits
for machinery and equipment and job creation; and,
- A reduction to the industrial property tax on warehouses
located on a manufacturing site from 10.5 percent to 4 percent, an
incentive to help the state attract distribution centers.
The Economic Development Competitiveness Act is available at:
http://www.scstatehouse.gov/sess118_2009-2010/bills/4478.htm.
return to the top of the page
New Era Outlined in U.S. Space Policy
A national space agenda based on competition and national pride
— the space race as it has been called
— fits bygone times, according to the new
National Space Policy statement released by the Obama
administration on June 28. The new era outlined in the 14-page
document calls for space-venturing nations to embrace shared
principles of responsibility, peace, transparency, no claims of
national sovereignty, and recognizing "purposeful
interference" with another nation's
space systems is an infringement of that
nation's rights and grounds for self-defense or
deterrence.
U.S. leadership in space is expected to be maintained through
space-related research, assured access to space (e.g., using
American-manufactured vehicles for payload launches), enhanced
spaced-based global positioning, navigation satellite and timing
systems, quality of space professional workforce and interagency
cooperation.
The policy statement outlines numerous guidelines related to
international, environmental, radiofrequency spectrum power, sector
(commercial and civil), and space use issues as well.
As a result, the brief policy statement may help state
and regional space-related TBED strategies focus or refocus
investment priorities going forward in areas like identifying
research thrusts, exploiting new space-related technologies, and
new commercial space opportunities.
The National Space Policy of the United States of America
is available at:
http://www.whitehouse.gov/sites/default/files/national_space_policy_6-28-10.pdf.
return to the top of the page
Recent Research
Deloitte: U.S. Manufacturing
Competitiveness to Decline through 2015
U.S. manufacturing competitiveness will continue to decline,
according to the 2010 Global Manufacturing Competitiveness
Index (GMCI). Index projections suggest, by 2015, Brazil will
have overtaken the U.S. for fourth in the global rankings behind
China, India and the Republic of Korea. The report concludes the
increasing talent pools worldwide, coupled with higher U.S. wages,
have placed U.S. manufacturing at a disadvantage in the global
markets. However, the U.S. should remain at the forefront of
manufacturing innovation due to a focus on strengthening science
and technology research, the strong intellectual property rights
(IPR), technology transfer policy, and STEM initiatives.
The report was created through a partnership between
Deloitte's Global Manufacturing Industry group
and the U.S. Council on Competitiveness. Based on survey responses
from more than 400 senior global manufacturing executives and key
government decision makers, researchers developed an index that
ranked the "10 drivers of global manufacturing
competitiveness." Respondents also were asked to rate
the overall manufacturing competiveness of 26 countries for 2010
and 2015.
Worldwide, respondents agreed that talent-driven innovation is
the top ranked driver of global manufacturing. The
"Asian juggernauts" (i.e. China,
India and Korea) and other nations expected to increase their
competiveness (e.g. Brazil, Russia and Poland) have successfully
cultivated and retained a strong talent pool comprised of skilled
workers, scientists, researchers, engineers, and teachers. Workers
capable of fueling innovation and improving production efficiency
have overtaken the availability of "cheap
labor," which finished third in the global rankings.
Executives with businesses operating in the United States found
the U.S. to have two advantages, but also face several
disadvantages in manufacturing competiveness. Intellectual property
protection (75 percent of respondents) and technology transfer
& adoption (61 percent) are the strongest contributors to U.S.
competitive advantage in manufacturing. They are seen to increase
U.S. competiveness due to increased royalty revenues and they
create incentives for further investments in R&D. These
advantages keep the U.S. at the cutting edge of manufacturing
innovation. However, government policies and laws pertaining to
immigration (32.7 percent of respondents), product liability (42.9
percent), healthcare (51.0 percent) and corporate tax (53.1) were
reported to be disadvantages to U.S. competiveness. These policies
are seen to increase the cost on producers and
"discourage capital investments." Due
to the recent financial interventions (e.g.
"bailouts"), government intervention
and ownership in companies was ranked as the number one
disadvantage (59.2 percent of respondents) to U.S. competitiveness
in manufacturing. In the long-term, respondents believe that
government financial intervention and ownership will hurt American
competiveness.
The 2010 Global Manufacturing Competitiveness Index is
available at:
http://www.deloitte.com.
return to the top of the page
Useful Stats
Federal R&D Obligations by State, FY
2002-07
In 2007, the federal government dedicated $111.4 billion to
R&D, an amount roughly equal to 0.81 percent of the U.S. gross
domestic product (GDP), according to a recent report from the
National Science Foundation (NSF). While research-intensive states,
such as California, Maryland, Massachusetts and Virginia are the
leading targets for federal R&D spending, several other states
attracted a comparable amount of federal funding relative to their
economies between 2002 and 2007. Montana, Washington, Utah,
Tennessee and Colorado led the country in expanding their federal
R&D obligations during that five-year period. The District of
Columbia and New Mexico rank with the top states in federal
obligations relative to their gross state product (GSP). Despite a
general pattern of positive growth around much of the country,
federal obligation rates fell in many southern states during this
period.
NSF's Federal Funds for Research and
Development series illustrates trends in the federal
government's funding obligations for science and engineering
R&D. The series tracks federal support to government agencies,
academic institutions, research centers, state and local
governments, nonprofit organizations, as well as private companies.
It provides detailed information on funding agencies and research
performers by state.
Using the most recent report from this series, SSTI has prepared
a table showing federal R&D obligations by state for each year
from 2002 to 2007. The table includes data on the change and
percentage change in funding between FY06 and FY07. It also includes
data on funding changes over the five-year period and the size of
federal R&D obligations relative to gross state product. The
table is available at: http://www.ssti.org/Digest/Tables/063010t.htm
(See the May 26, 2010
issue for SSTI's data and analysis on federal R&D obligations
to industry by state.).
During the five-year span between 2002 and 2007, federal R&D
obligations increased by 32.7 percent, though spending slowed
considerably in 2006 and 2007. Because of the nature of federal
R&D funding, the data on annual change in funding levels can be
misleading. Specific projects, particularly the construction of
facilities, can cause single-year jumps in funding levels that do
not continue into the next year.
California, which continues to be the country's leading federal
R&D funding recipient, also experienced the largest increase in
funding between 2002 and 2007. Federal obligations grew by 35.9
percent, from $15.7 billion to $21.3 billion. Maryland, Virginia,
Massachusetts and Texas round out the top five overall recipients
in 2007, all of which increased their obligations by more than the
national average during the five-year period.
A single-year obligation in Montana skewed the performance data
for that state in 2007 putting it among the top performers relative
to its smaller economy. A nearly one-half billion dollar, intramural
construction investment by the National Institutes of Health for a
national biocontainment laboratory placed Montana at the top of the
list for one-year and five-year relative growth. In 2007, the state
ranked sixth in federal obligations relative to GSP. During the
other years of the study, however, Montana received obligations
consistent with the lower rates relative to previous funding and
GSP common in the Mountain states.
During fiscal years 2002-2007, many southern states saw their
federal R&D obligations greatly reduced. Fourteen states
experienced cuts during that five-year period. Four of the five
states with the largest cuts were in the South, including Georgia,
Mississippi, Kentucky and Alabama. Louisiana, Oklahoma, Missouri
and West Virginia also had their federal R&D funding reduced.
This pattern in the South is exacerbated by a few
single-year funding anomalies, including an unusually high-level of
funding in Georgia in 2002. Even given these quirks, funding
throughout the South (except in North Carolina and Tennessee) did
not keep pace with the national average.
Federal Funds for Research and Development:
Fiscal Years 2007-09 is available at: http://www.nsf.gov/statistics/nsf10305/pdf/nsf10305.pdf.
return to the top of the page
Staff Picks
U.S. Dept of Commerce Holding Regional Forums on Role of
Universities
The U.S. Department of Commerce and its Office of Innovation and
Entrepreneurship at the Economic Development Administration
announced four forums to be held across the country with university
leaders and key stakeholders to discuss the role of universities in
innovation, economic development, job creation and
commercialization of research.
Read more ...
Broadband Availability to Expand
The Obama administration is seeking to nearly double the
wireless communications spectrum available for commercial use over
the next 10 years, an effort that could greatly enhance the ability
of consumers to send and receive video and data with smartphones,
according to the New York Times.
Read more ...
Supreme Court Loosens Patent Eligibility
The Supreme Court loosened the limits on the kinds of inventions
that are eligible for patent protection. The Court rejected a lower
court's reasoning that only inventions involving machinery or
physical "transformations" are eligible for patents.
Read more ...
Science Foundation Arizona Has $153M Economic Impact
Science Foundation Arizona's total economic
impact reached $153 million between 2007 and 2009, according to a
new economic impact report. The $50 million in grants were directly
responsible for 1,151 jobs.
Read more ...
University Tech Commercialization Gets National
Attention
The New York Times provides an overview of some of the
activity occurring at universities, including proof-of-concept
centers.
Read more ...
Recession's Impact Reaches Half Adult
Population
The recession has directly hit more than half of the nation's
working adults, pushing them into unemployment, pay cuts, reduced
hours at work or part-time jobs, according to a new Pew Research
Center survey.
Read more ...
return to the top of the page
