SSTI Digest

Legislators in New York rejected Gov. David Paterson's proposal to consolidate the state's primary organization for supporting and enhancing technology-based economic development into the state's traditional economic development organization (see the Dec. 17, 2008 issue of the Digest). Leaving NYSTAR as a stand-alone entity, the lead TBED agency for New York will continue to administer successful investment, business assistance, and research programs that have helped to create high-wage jobs for nearly a decade.

Gov. Paterson signed the FY10 Transportation, Economic Development and Environmental Conservation Budget last week, providing $42.2 million of new appropriations for the New York Foundation for Science, Technology and Innovation (NYSTAR). This is a $6.2 million decrease from FY09. The figure does not include reappropriation carryovers from previous years.

Venture capitalists increasingly turn their attention to investment opportunities outside of the U.S., according to several recent industry reports. Though the U.S. continues to dominate the global venture industry, the current economic crisis has negatively affected national fundraising, investment and exits. At the same time, venture investment outside the U.S. reached a record $13.8 billion in 2008, a five percent increase over the previous year. China, India and Israel in particular have made strides in building thriving VC markets. Though the crisis has dampened some short-term figures in those countries as well, long-term expectations are high and many international venture firms expect their activities in those countries to grow in the coming years.

While there is no question that the economic recession has taken a toll on states' fiscal conditions, the degree by which states are affected can vary widely from one state to another, as evidenced most recently in Arkansas and Georgia. In Arkansas, legislators wrapped up their 2009 session with a plan to distribute a $300 million surplus, while the budget agreement made in Georgia would cut spending by $1.6 billion in the coming year. The following overview provides an outline of legislative actions affecting the two states' programs that support tech-based economic development efforts.

Arkansas
Operating with a nearly $300 million surplus, lawmakers passed a spending plan last week that authorizes funds for several economic development projects, including $50 million for Gov. Mike Beebe's Quick Action Closing Fund to attract new businesses to the state. 

Funding for the New Jersey Commission on Science and Technology, which administers the state's stem cell research program, would be cut nearly in half under Gov. Jon Corzine's FY10 budget recommendation. The commission is slated to receive $10.4 million, a decrease of $9.9 million from the FY09 adjusted appropriation, to administer grant programs focused on commercializing new technologies, develop early-stage growth companies and business incubators, and enhance New Jersey's stem cell research capability.

News of the reduction comes on top of additional proposed cuts to the commission in the current fiscal year. In February, Gov. Corzine called for additional 2009 budget cuts totaling $1.3 billion that included a reduction of $12.7 million for Commission on Science and Technology grants, and in January, the governor proposed a $13.7 million reduction for the New Jersey Stem Cell Research Institute.

South Dakota shows a $3 million TBED investment in strategic research areas can yield impressive results for a state strengthening its position in an innovation-based economy. 

Since 2004, South Dakota's five research centers have had a $111 million impact on the state economy, according to new data released by the South Dakota Tourism and State Development's Office of Commercialization. This impact represents a substantial return on investment for the state's initial $3 million investment five years ago. The impact numbers are being released as the state concludes its funding for the original five centers and prepares to launch several new centers, which will be supported by the state through 2014.

The $111 million impact includes more than $77 million in research spending and the activities of the 12 companies that have expanded or launched as a result of the centers. The centers also have helped create 550 new jobs and eight patent applications.

The expansion of undergraduate science programs within foreign countries positively affects the number of students from these same countries seeking advanced degrees at U.S. academic institutions. However, as foreign countries experience the maturation and growth of their doctoral-level programs, combined with growing employment opportunities in their economies, the flow of students to the U.S. changes. These insights, among others on the determinants of the supply of PhD students and the demand for PhD degrees, are discussed in the recent working paper, "Internationalization of U.S. Doctorate Education" by John Bound, Sarah Turner, and Patrick Walsh.

Useful stats columns in recent issues of the Digest have characterized academic R&D expenditures from two different angles: those expenditures made from industrial sources of funding (April 1) and total academic R&D expenditures (Mar 25). The primary source for the data was the National Science Foundation's Academic R&D Expenditures series, the compilation of an annual survey NSF conducts of the 680 largest academic institutions in the country.

The  complete description of this opportunity and others are available at http://www.ssti.org/posting.htm.

Penn State seeks a director for the newly formed Economic Engagement Initiatives unit in the Office of Economic and Workforce Development. The director will work collaboratively with academic, outreach, research, and other centers and units to present a unified point of entry to resources in support of economic development. The director is expected to generate significant grant-funded initiatives to Penn State. Qualifications include a master's degree (PhD preferred) or equivalent, plus five years of work-related experience in economic and workforce development or related fields that include evidence of organizational leadership and supervisory roles.

SSTI has an effective new learning tool for TBED policymakers and practitioners seeking guidance in approaches to building and sustaining tech-based economies. Through exclusive interviews with Excellence in TBED Award recipients, find out first-hand how these award winning initiatives successfully responded to a critical need by applying innovative approaches to generate substantial economic gains for their region. Technology 2020 2007 Winner for the Building Entrepreneurial Capacity category

The need for state and local support for tech-based economic development grows more critical in the current recession, based on recent unemployment reports for key technology sectors. Layoffs at high-tech companies during the first quarter of 2009 were at their highest point since 2002, according to outplacement firm Challenger, Gray and Christmas. Reported job losses at tech companies totaled 84,217, up 27 percent over the fourth quarter of 2008 and up 485 percent over the first quarter last year. The job loss figures for the first quarter of 2009 already exceed the first two quarters of 2008 combined.

Though the report does not take new hires into account, the news is discouraging for the high-tech sector, which has now endured its fifth consecutive quarter of increasing layoffs. Only the automotive sector and retail incurred more job losses in the first months of 2009.

Congress has been debating the need to revise U.S. patent law for years, and, while the debate certainly is not over, a significant hurdle was passed last week when the Senate Judiciary Committee voted 15-4 to move S.515, as amended, for full Senate consideration. 

Several provisions in the bill as introduced had met opposition from vocally significant groups, such as the biotech and academic communities. On the other side of the issue have been equally powerful players such as large information technology & communications companies.

With a $25 million funding opportunity currently on the streets for manufacturing and infrastructure research projects, the Technology Innovation Program (TIP) has added three more locations and dates for proposers' conferences next week. The free public meetings will provide general information regarding TIP, guidance on preparing proposals, and the opportunity for questions and answers. NIST/TIP staff will answer questions about the TIP eligibility and cost-sharing requirements, evaluation and award criteria, selection process, and the general characteristics of a competitive TIP proposal at the Proposers' Conferences and by phone and email.

Monday, April 13, 2009
Boston Massachusetts
1PM - 5PM Eastern Time
Marriott Boston Cambridge

Wednesday, April 15, 2009
Detroit Michigan
1PM - 5PM Eastern Time
Detroit Marriott at the Renaissance Center