SSTI Digest

The European Commission's 2001 European Innovation Scoreboard, characterizing the strengths and weaknesses in the capacity for innovation of the European Union (EU) and its member states, shows the EU continues to lag behind the U.S. and Japan.  Released October 1, the scoreboard uses 17 indicators to rate each member state's capacity for encouraging innovative business and improving the competitiveness of their industry through innovation. The aspects of the innovation process measured by the scoreboard are:  Availability and the use made of people with the right skills, using figures including the supply of new scientists and engineers and the percentage of the workforce employed in technology sectors of industry.  Creation of new ideas, based on figures for R&D expenditure and patent applications.  Innovation by firms as measured by statistics such as the percentage of small and medium-sized enterprises (SMEs) that develop product or process innovations themselves or in…

Whether it's called clusters or localization economies, the aggregation of firms in the same or closely related industries has captured the attention of many state and local tech-based economic development efforts. Understanding the phenomenon and formulating effective public policy to encourage or support clustering presents challenges for practitioners and researchers alike.  In addition to works on the topic previously covered in the Digest and available in SSTI’s Bookstore (such as Michael Porter’s On Competition or Ross DeVol’s Blueprint for a High-Tech Cluster), localization economies also have captured the research interests of international researchers. For example, the Canadian Innovations Systems Research Network (ISRN) is in the process of conducting a five-year $2.5 million (Canadian) study to examine the impact and importance of cluster-driven innovation in Canada. According to the ISRN website, Innovation Systems and Economic Development: The Role of Local and Regional Clusters in Canada will “investigate how local networks of firms and supporting…

A new biotech-opolis in Quebec soon may serve as one of the best organized business centers for biotech, biopharmaceutical, and biocomputer companies in the world, government leaders hope. The Quebec government, Investissement Quebec, the City of Laval, Laval Technopole and Institut national de la recherche re scientifique (INRS), are investing $250 million over five years in cash, in-kind donations, and forgone tax revenues to support the massive cluster project. Additional partners include various academic, economic and scientific communities in metropolitan Montreal and Laval. The City of Biotechnology and Human Health of Metropolitan Montreal, or Biotech City for short, will function as a business and science center, with more than $100 million alone coming from INRS to equip the city with major scientific facilities and to restructure the INRS’s Armand-Frappier campus. The INRS focuses on research and learning at the graduate school level while responding to the economic, social and cultural needs of Quebec. Biotech City – being situated on…

Imagine President Bush using his entire State of the Union Address to present a $23 billion five-year strategy to encourage research, innovation, and entrepreneurship in the country. While it has not received much press in the United States, the equivalent happened when Australian Prime Minister John Howard gave his annual Federation Address on January 29. Backing Australia’s Ability: An Innovation Action Plan for the Future is the Howard government’s comprehensive strategy to strengthen the Commonwealth’s position in the global economy. The five-year price tag to the government for the new initiatives is 2.9 billion Australian dollars (US equivalent is $1.56 billion). An additional $6 billion ($3.23 billion US equivalent) in private investment is expected to be generated from the plan. In 2000-01, the country of only 19.3 million people spent $4.5 billion ($2.43 billion U.S. equivalent) on research and innovation programs. For comparison, the $2.9 billion increase is the equivalent in US dollars of committing $81 per person in new funding for tech-based…

Why do some start-up technology businesses choose to directly commercialize their innovations, taking on the industry titans as is common in the electronics industry, while other new tech firms, such as those involved in biotechnology, choose a path of cooperation with the industry leaders, commercializing through licenses, joint ventures, and outright acquisition? The answer(s) should help economic development practitioners and science and technology policy makers design the most effective strategies for technology-based entrepreneurial assistance. Joshua Gans, David Hsu and Scott Stern set out to define the discerning factors or determinants for choosing each path in When Does Start-up Innovation Spur the Gale of Creative Destruction?, an August 2000 Working Paper from the National Bureau of Economic Research (NBER Working Paper #7851). Gans, of the University of Melbourne, Australia, and Hsu and Stern, both of the Sloan School at MIT, work to test how three factors --- intellectual property protection, transactional costs for partnering (including expropriation of the technology), and…

Last week, Mary Harney, Ireland’s Deputy Prime Minister and Minister for Enterprise, Trade and Employment, announced the establishment of a £560m ($681M U.S.) Technology Foresight Fund to establish Ireland as a location for world class research excellence in niche areas within biotechnology and information and communication technologies. According to Reuters’ reports, funding for the new initiative will be spread over seven years. The Technology Foresight Fund — the country’s single largest investment ever for research, technological development and innovation — was conceived and designed by the Irish Council for Science, Technology, and Innovation (ICSTI), a publicly created organization to advise the Irish government on the strategic direction of science, technology and innovation policy. Separate Task Force panels or subcommittees investigated technology development issues in eight industrial sectors: natural resources; chemicals/pharmaceuticals; health and life sciences; information and communications technology; materials and manufacturing; transport and logistics; construction/infrastructure; and energy. From the panels’ findings, the Task Force advanced several…

Eisenhower Exchange Fellowships announces a competition for U.S. citizens in leadership positions with significant professional experience (10-20 years) for Fellowships to: Hungary: Technology in education, economy, and communications; and,  Malaysia: Computer technology and systems in education; science and technology policy; and, telecommunications policy. Fellows will meet with top level authorities in government and business throughout the country for a period of 4-10 weeks.  Benefits include all travel costs and living allowance for Fellow and spouse. Applications are due November 30, 1998. Applications may be requested from: J. Hartl, Eisenhower Exchange Fellowships, 256 S 16th St, Philadelphia, PA 19102; e-mail: jhartl@eef.org; and, fax 215/546-4567.

Former Ohio Governor Richard F. Celeste was sworn in as the United States Ambassador to India last week. Celeste has been a leader in the field of technology-based economic development for the last 15 years. While governor, Celeste established Ohio's Thomas Edison Program. Since leaving office in 1991, he has played a key role in advancing state-federal cooperation in the area of science and technology. Among other positions, Celeste served as chairman of Carnegie Commission on Science, Technology, and Government's Task Force on Science and Technology and the States; co-chairman of the State-Federal Technology Partnership Task Force; and as vice chairman of the State Science and Technology Institute's Board of Trustees. His support, encouragement, and counsel will be missed by the SSTI staff, who wish him well in his new post.

Japan is on schedule to double the government's R&D investment by the year 2000, according to a June 13 National Science Foundation Issue Brief. Japan originally declared in 1992 its intent to double the amount of funding provided for R&D. In line with this goal, the Japanese government approved an R&D budget increase of 12.5% in 1996 and a 6.8% increase in 1997. If this expansion continues, annual government R&D funding will be approximately $18 billion in the year 2000, double the 1992 budget in constant dollars. In relative terms, Japan's total R&D investment (both public and private) is approximately the same size as the U.S. Japan invested 2.6% of its GDP in 1994 in comparison to the U.S. investment of 2.5%. However, the proportion of government funds within the nation's R&D budget is considerably smaller. The government of Japan provides only 20% of the total R&D budget, whereas the average industrial nation funds between 35-40% of the total budget. The increase in the Japanese Government's spending is focused on strengthening Japan's human and…

During the past decade, the European Union (EU) invested heavily in civilian R&D by building first-class laboratories and expanding higher education in science and engineering. Its efforts, according to the Data Brief for a new National Science Foundation report, Human Resources for Science and Technology: The European Region, are narrowing the lead the U.S. holds in R&D. For example: Western European countries invested a total of $103.5 billion in all types of R&D in 1993, compared to $137.3 billion in the United States. The amount spent on research performed at academic institutions in Western Europe -- approximately $20 billion in 1992 -- equals that spent at U.S. universities and colleges. The report also found that over the 17 year period examined in the report, Western and Central European countries nearly doubled their annual production of university degrees in the natural sciences and engineering (NS&E). In 1992, Europe produced almost 300,000 NS&E degrees (including more than 25,000 doctoral degrees), compared to 173,000 degrees (18,000…

The International Institute for Management Development has released its annual World Competitiveness Yearbook, and the United States has reclaimed its spot atop the list. The U.S. was followed by Singapore, Hong Kong, Japan, and Denmark. World Competitiveness is defined by IMD as "the ability of a country to create added value and thus increase national wealth by managing assets and processes, attractiveness and aggressiveness, globality and proximity, and by integrating these relationships into an economic and social model." National wealth is the end result of world competitiveness. The World Competitiveness Yearbook 1996 considered eight different factors: domestic economy, internationalization, government, management, finance, infrastructure, science and technology, and people. Altogether, they account for 225 criteria where each of the 46 countries is ranked individually. The World Competitiveness Scoreboard is the aggregation of all these criteria and provides each country's global ranking. According to the report, "the United States (1st) has reinforced its leadership position…