SSTI Digest

University of Buffalo Entrepreneurial Awards  An in-depth look at the one-year success of a student company to win last year's first Panasci Entrepreneurial Awards at the University of Buffalo recently was highlighted in the Buffalo News.  The three students who comprise Student Voice received $25,000 in seed capital as first prize in a competition administered by the Center for Entrepreneurial Leadership (CEL) in the School of Management. Student Voice, a market research firm specializing in data on college-age consumers, uses personal digital assistants and peer-to-peer, in-person interviews for data collection.  The students' award was provided through a $1 million endowment donated to the university by UB alumna Henry Panasci, a pharmacist/business executive turned venture capitalist. Second prize recipients received $15,000. Seventeen new student teams have entered this year's competition, a field which will be narrowed to five finalists for presentations in January.  To compete for the awards, UB…

"If technology is at the core of the Innovation Economy, then investment in research and development is one of the principal drivers in the creation of that technology." The sentence, lifted from the new Massachusetts Technology Collaborative (MTC) report, Maintaining the Innovation Edge: The Case for Creating a Massachusetts Science and Technology Strategy, is valid for the entire country but rings especially true for the Commonwealth, a perennial leader in R&D investment and innovation. Past MTC research reveals innovation is at heart of nine key industry clusters in the Commonwealth. In fact, 25 percent of the state's total employment is tied directly to technological innovation. Written by MTC Director of Federal Programs Bob Kispert, Maintaining the Innovation Edge scrutinizes R&D funding in the state over the past decade and unveils some unsettling trends for the future growth and stability of the Massachusetts economy: The Massachusetts federal R&D portfolio is becoming potentially too concentrated in life sciences,…

With the emphasis many state and local tech-based economic development organizations have placed on biotechnology over the past 12-18 months, few are far enough along in implementing their strategies to point to more than a handful of successes or new construction projects. The recent explosion in public investment of resources and policies toward developing local biotech capacity is largely based on the promise of anticipated economic gains in the near or not-so-near future.  Independent analysis of the long-term impact of specific state and local tech-based economic development policies are rare. Some programs launched in the 1980s that have commissioned outside impact studies, such as the Edison Technology Centers, the Ben Franklin Technology Partnership and Utah’s Centers of Excellence, have discovered strong returns for the public’s investment. (See the 12/20/96, 10/22/99, and 1/28/00 issues of SSTI’s Weekly Digest in our web archives for these stories.)  Reviews of localized impacts of state tech-based economic development policy…

Is a strong university research component critical to local tech-based economic development? Many argue this position, including SSTI (Using Research and Development to Grow State Economies). Using data on royalties, licenses, and job creation figures, others have demonstrated the economic contributions of university R&D. (See for instance, the annual licensing survey from the Association of University Technology Managers.) But can strong research universities contribute more to local technological innovation than large industrial research laboratories – or can communities achieve the same degree of success in building tech-based economies by concentrating resources toward attracting industrial research laboratories? At issue, are the local “spillover” effects of industrial and academic research. Spillovers may include, for example, new company formations, job creation, increased research contracts, etc. Which type of research on average, industrial or academic, results in more spillovers to the local economy? John Adams, with the Department of…

Christopher Anderson has been promoted to become president of the Massachusetts High Technology Council. Prior to his appointment, Mr. Anderson served as vice president and general counsel to the organization.

Joe Alviani has resigned as Executive Director of the Massachusetts Technology Collaborative to accept a position in the private sector. MTC Executive Vice President Philip Holahan is serving as Interim Executive Director.

It is widely argued in the tech-based economic development community that New Economy businesses, specifically computers and information technology, account for the tremendous economic growth of the last half of the 1990s. But does the data support this? A look at productivity growth may help to answer the question. Productivity growth is seen as a measure of progress: increases in productivity are often associated with improvements in the nation’s economy and society’s general welfare. William Nordhaus, Professor of Economics at Yale University, has written a series of three papers exploring the measurement of productivity and growth, with particular attention to the contributions of the New Economy sectors. In the first, Alternative Methods for Measuring Productivity Growth, Nordhaus argues the link between productivity growth and economic welfare is not clear. Traditional measures of productivity growth do not reflect improvements in the economic welfare of society. He breaks down the current economic formulae used for measuring productivity growth and closes with an alternative…

Many tech-based economic development programs recognize the importance of having seed and venture capital accessible to their start up tech firms and entrepreneurs. Some practitioners, though, see a challenge in encouraging equity investment in more conservative, risk adverse regions and localities. The dot-com “correction” of last year probably did not help. Accurate estimates of the average return on venture capital investment (VC) may help to open the purse strings of hesitant angel and seed funding sources. But what is a valid estimate of the return on individual venture capital investments? Obtaining an answer to that question has not been easy in the past. In the new working paper, The Risk and Return of Venture Capital, John Cochrane, Professor of Finance with the Graduate School of Business of the University of Chicago, takes on the issue. Attempts by economists in the past have been plagued by a lack of accurate data on the market value of individual VC deals between initial investment and disposition through an initial public offering (IPO), acquisition/merger, or failure…

Editor's Note: The fifth installment in our review of the Governors' inaugural addresses, state of the state addresses, and budget messages for 2001. The first four articles in the series were over the past four weeks. Those issues of the SSTI Weekly Digest and all other previous editions are available on our website: http://www.ssti.org/Digest/2001/headlines01.htm Massachusetts Governor Argeo Paul Cellucci, Budget Recommendations, FY 2002, January 24, 2001 http://www.state.ma.us/bb/fy2002h1/default.htm Office of Business Development - $4,538,898 for the operation of the Massachusetts office of business development, including funding for statewide technology related grants, with a limit of $536,000 for the Massachusetts international trade council. An increase of $1,113,466 over last year’s recommendation. Biomedical Initiatives - $400,000 for a contract with the Massachusetts  biotechnology research institute; provided, that the institute submits a plan for financial self-sufficiency by July 1, 2002. A decrease of $100,000 from the FY01…

Using patent filing and quality as a measure of innovation, “a dollar of venture capital appears to be about three times more potent in stimulating patenting than a dollar of traditional corporate R&D,” according to a July 2000 paper by Samuel Korton (Boston University) and Josh Lerner (Harvard University). The authors report in Assessing the Contribution of Venture Capital to Innovation that, although venture capital averaged less than three percent of corporate R&D from 1983-1992, it was responsible for almost eight percent of US industrial innovations during the same time period.  The findings are based on a study of the influence of venture capital on patent activity across 20 industries over three decades. The authors hope the study is the first of many to quantify the impact of venture capital on innovation. The paper can be found on line at: http://www.people.hbs.edu/jlerner/publications.html 

The July-August issue of Technology Review, MIT's Magazine of Innovation, includes a special report on university research. The TR University Research Scorecard, written by TR associate editor Rebecca Zacks, ranks the top U.S. universities for their performance in patent quality (called "technological strength") and licensing revenues. The results demonstrate number of patents issued does not necessarily equate to financial return to the universities. While the University of California and MIT dominate the patent quantity side of the equation, other institutions are earning more in licensing income. "Columbia, for example, ranks second in licensing income and makes nearly a quarter of its $260 million research investment back in royalties and fees, even though the school garnered only 34 patents per year on average from 1994 to 1998. Third-place Florida State University, meanwhile, rakes in an astounding 42 percent of its $112 million annual research budget through a mere 10 licenses or options deals," according to the article.  The complete article and tables can be viewed at…

On April 19, the Massachusetts Supreme Judicial Court cleared the way for the Massachusetts Renewable Energy Trust Fund to begin operations with a unanimous ruling that the funding mechanism is constitutional. Between 1998 and 2003, the Trust, managed by the Massachusetts Technology Collaborative, will receive about $150 million to accelerate the use of cleaner sources of electricity and to invest in the development of the renewable energy industry in Massachusetts. In subsequent years, the Trust will receive about $20 million a year. As an outgrowth of electric utility deregulation, the Trust was created in 1998 by the legislature to promote the development of renewable energy in the Commonwealth through a series of initiatives that exploit the advantage of renewable energy in a more competitive marketplace. The Massachusetts Technology Collaborative was selected by the legislature to lead this effort. The ability to ramp up to full operation was initially constrained by a lawsuit challenging the Trust’s funding mechanism, a monthly charge on customer electric bills known as a systems…