SSTI Digest

Shortly after a General Assembly vote last week, Pennsylvania Gov. Ed Rendell announced the bipartisan approval of the remaining components to the state’s economic stimulus package. The governor's plan is intended to fuel major new investment in communities across the state.

Eight final programs were approved by the General Assembly, adding to the previous five that were passed in December 2003 and February 2004. The passage of all components of Pennsylvania's stimulus package calls for more than $2 billion in investment to attract at least another $5 billion in private investments for community revitalization, site preparation, infrastructure improvement and construction, and businesses. The investments will focus on high-growth companies and provide resources to allow traditional industries such as manufacturing access to new technologies in order to enhance productivity, according to the Department of Community and Economic Development.

Legislation to create investment tax credits and a technology commercialization grant and loan program was approved by the Wisconsin Assembly just before the close of the legislative session. Intended to encourage high-tech industry and entrepreneurship in the state, Senate Bill 261 is designed to create approximately $62 million in new funding for start-ups.

A recent study from Competitive Wisconsin, Inc., a nonpolitical lobbying group of agriculture, business, education and labor leaders, reported that the state is losing ground on key economic indicators of financial, employment and knowledge-based strengths. Venture capital (VC) disbursements per worker in 2002 were down nearly 75 percent from their peak in 2000, the study shows. To help give small businesses the tools they need to be successful and create jobs, SB 261 offers assistance in  three areas:

Increased financial support for start-up companies and the research sector has the attention of Canadian Minister of Finance Ralph Goodale. In the Minister's 2004 budget report, released last month, venture capital (VC) initiatives totaling $270 million (CAN) are targeted for investment. Combined with private sector investments, total VC funding is expected to amount to $1 billion.

Canada is uniquely positioned to benefit from the current global economic recovery, the budget report states. The VC funding, which is reserved for the Business Development Bank of Canada (BDC) and the Farm Credit Corporation, would be directed into four areas:

Although Massachusetts' universities may be at the fore of nanotechnology research and development (R&D), they must continue to win on research for the state to stay competitive for federal funds, suggests a recent report by the Massachusetts Technology Collaborative (MTC) and the Nano Science and Technology Institute (NSTI).

Massachusetts is experiencing a surge in nanoscale technologies, according to Nanotechnology In Massachusetts. As of February 2004, close to 100 companies in the state are using or developing the technologies, half of which are within the healthcare and electronics industries. Massachusetts' venture capital community also has invested in companies using or developing nanotech. In 2003, these firms attracted more than $120 million in funding, second only to California's $480 million.

A significant reduction in employment among southwestern Pennsylvania's technology industries in 2002 was not enough to offset signs of a turnaround, according to new data released by the Pittsburgh Technology Council (PTC). Over the second half of the year, a turnaround began to emerge and technology companies accounted for nearly 17.5 percent of the region’s workforce, PTC's annual State of the Industry Report shows. The region's technology industries also experienced an average 4 percent increase in annual wages.

Released last month, the PTC report attempts to take a deeper look at the emerging technology clusters found in southwestern Pennsylvania. The updated report considers the contributions of technology companies to the 13 counties comprising the region, drawing on growth numbers from 2002.

The Howard Hughes Medical Institute (HHMI) announced last month a partnership with the Loudoun County, Va., school district to donate $1 million per year to establish a biotech magnet program for area high school students.

The nonprofit’s support of the Loudoun district was made in connection with a tax break for a new research campus at Janelia Farm, scheduled to open in 2006. The district is hoping some of the nearly 300 scientists expected to work at the new facility will also sponsor student research programs and act as mentors.

An empty wing of the district’s new Dominion High School will house the program that will be open to students through a competitive application process. Students will attend the program every other day, while remaining at their home high school for other classes and extracurricular activities.

Oklahoma's Higher Education Day, when students and faculty are given the chance to discuss their concerns with the state legislature, recently provided a golden opportunity of sorts for Gov. Brad Henry. Held March 9 at the State House, the event enabled the governor to advocate support for a bond issue that would fund endowed chairs at Oklahoma's colleges and universities.

According to Gov. Henry's budget figures, $44 million in private donations are waiting for matching state funds for the endowed chair program. The governor is proposing a bond issue to match those donations. Funding endowed chairs, which enables a college or program to recruit and retain faculty whose reputations elevate its prominence, is a key component of the governor's $1 billion Economic Development Generating Excellence (EDGE) initiative (see the Jan. 23, 2004, issue of the Digest).

A new fund developed by the Maine Technology Institute (MTI) is expected to lead to greater commercialization of technologies in the northeast state. Created through a reserved proportion of MTI’s annual grantable funds, the Accelerated Commercialization Fund (ACF) will allow previously funded MTI companies the chance to achieve significant growth. To qualify for funding, companies must at a minimum demonstrate significant potential for financial and economic development returns.

The financing gap that exists between some companies' research and development (R&D) and sales is the motivating force behind the Maine fund. MTI plans on the investments piggybacking on other investors' terms, generally in the form of equity, and either converting existing debt or providing additional capital to help advance new products toward the market.

Innovations in public and private institutions could be the key to aligning governance with opportunity, according to the Center for the Study of Rural America's latest annual report.

Previous focus for the center has been on how rural regions can build new economic engines, which the report's authors contend is well understood by public and private leaders. What is less understood, they explain, is the need to effectively change how regions reach economic decisions, a process they call rural governance.

New governance, suggests Innovations in Rural Governance, will define how decisions will be made within a region and how key institutions of federal, state and local government, higher education and the private sector will work together.

Looking to jumpstart the federal policy process regarding broadband Internet access, the Alliance for Public Technology (APT) has released A Nation of Laboratories, Broadband Experiments in The States, a report examining various broadband policies and programs nationwide.

In its report, APT recognizes that some states have productive programs in place, while others have none at all. APT contends that only a national policy can ensure full and equitable access to advanced telecommunications services.

One of the hottest political topics this year is the outsourcing of U.S. jobs to other countries. A Google search on "outsourcing" returns about 4.8 million pages. Reports from Gartner, Forrester Research, McKinsey & Company, AeA, and the Institute for International Economics, among others, have looked at the topic and fed the interest.

While the presidential campaigns attempt to deal with the issue, in the last week alone, four governor have taken steps to try and address some aspect of the outsourcing issue. As is typical in technology issues, state action defies party label and geography.

For years, defining "high technology" and identifying industries that fit within that classification has been a difficult task loaded with political implications. AeA, for example, has used a definition of high tech in its publication Cyberstates that places heavy emphasis on information technology.

In presentations around the country, SSTI has advocated using a definition based on work prepared by the Bureau of Labor Statistics (BLS) that defines high tech by data rather than ideology. Unfortunately, the BLS definition was developed under the Standard Industrial Classification (SIC) system. Attempts to translate those industry sectors into the North American Industry Classification System (NAICS) through correspondence tables and crosswalks results in a list lacking in precision because the individual user must make certain judgments as to whether or not an industry should be included.