Publisher's Note: FY2007 Budget Request Represents a Mixed Bag

Over the last year, there has been increased public and government attention on issues involving tech-based economic development. For much of the year, Thomas Friedman's The World is Flat has dominated the New York Times bestseller list. A series of reports from the AeA, Council on Competitiveness, and the National Academy of Sciences call for increased action by the federal government. To help address a flattening world, Congress is now considering significant bi-partisan legislation addressing those report's recommendations. And just in the last month, a series of governors have unveiled plans for dramatic new investments in innovation, science, and technology.



It is fitting, then, that President Bush made competitiveness a major theme of his State of the Union and, in his budget proposal, unveiled his American Competitiveness Initiative (see below for details).



A key portion of the American Competitiveness Initiative calls for major increases over the next 10 years in the physical sciences budgets at the Department of Energy's Office of Science, the National Institute of Standards and Technology, and the National Science Foundation. According to the plan,"President Bush plans to double, over 10 years, investments in innovation-enabling physical science and engineering research at the National Science Foundation (NSF), the Department of Energy’s Office of Science (DoE SC), and the Department of Commerce’s National Institute of Standards and Technology (NIST) core activities."



This proposal represents good news for anyone interested in tech-based economic development (TBED). More funding for research is needed for the U.S. to retain its national leadership in innovation. The proposal, however, is less ambitious than the plan Congress approved in 2002 to double NSF's budget by fiscaly year 2008. Under the president's proposal, the doubling will be for "innovation-enabling physical science and engineering research" and will take until FY 2017.



Less encouraging, in the FY 2007 budget request are the amounts proposed for several programs of importance to the TBED community, including:

• Advanced Technology Program is proposed (again) for elimination, a cut of $79 million from the FY 2006 level Congress approved.
• Manufacturing Extension Partnership would be cut to $46.3 million, a cut of $58.3 million from the FY 2006 level Congress approved.
• Partnerships for Innovation at NSF would receive a slight increase to $9.19 million, but still lower than its FY 2005 level.
• Economic Development Administration would increase $47 million to $327 million, a level that is still far below its FY 2002 level of $365.6 million.

In the area of education, the American Competitiveness Initiative calls for $412 million in spending on new programs. Yet, at a time when we need to encourage increased college participation, especially among underrepresented groups, the budget proposal calls for freezing the Pell grant program and would eliminate $303 million for the Gaining Early Awareness and Readiness for Undergraduate Programs, which supports early college prep activities for low-income elementary and secondary students. These programs are intended to discourage dropping out and to encourage postsecondary enrollment.



In short, the president's State of the Union represents an important step forward; unfortunately, the budget request doesn't come close to matching the State of the Union.