SSTI Digest

Stephen Jeffery has been appointed the new president/executive director of the Technology Association of Georgia.

Sandy Layman was named commissioner of the Iron Range Resources and Rehabilitation Agency (IRRRA) earlier this month. IRRRA promotes economic development in Northeastern Minnesota.

Tim Witsman recently resigned as president of the Wichita Area Chamber of Commerce to pursue other opportunities in the community. Witsman headed the area's lead economic development agency for 15 years.

Congress begins consideration of the Economic Development Administration (EDA) reauthorization legislation, which continues to include several initiatives to promote tech-based economic development. With the current authorization due to expire on September 30, 2003, the new legislation would authorize EDA's operations for five more years, beginning in FY 2004 and extending to FY 2008. The Administration's proposal includes $331.03 million for assistance programs and planning grants.

Generally, EDA stresses coordination, flexibility and performance as three areas of reform in its reauthorization bill. In terms of flexibility, the bill contains mechanisms to help EDA administer the 38-year-old program and to reward performance by emphasizing job growth. The bill also seeks to ensure that federal agencies are working together on common areas. For example, EDA would be made aware of the Department of Labor's workforce development efforts in an area.

Within two years, Indiana's agency for promoting economic development will become a quasi public-private partnership similar in concept to the Michigan Economic Development Corporation.

While in Minnesota, an agreement that resolved the budget impasse gives the state's lead science and tech organization a 12-month timeline to fully privatize from the state's support.

Indiana's and Minnesota's are the latest moves to test the largely uncharted waters of privatized public technology-based economic development, moves that stem, in part, from governors and state legislatures trying to maintain momentum in the knowledge economy without identifying alternate revenue sources within state government.

The Army last week announced the creation of a $25 million Venture Capital Initiative (VCI) to satisfy a critical Army technology requirement — obtaining lighter, more efficient power sources for individual soldier systems.

"Power and energy technologies are an opportune area for Army investment, particularly because the Army's interests parallel those fueling the commercial market," emphasized Dr. A. Michael Andrews, Army Chief Scientist.

The goal of the VCI is to jump-start promising technologies in the area of portable power and energy to lighten soldiers' loads as they operate worldwide, often in extreme environments and under austere conditions. It will focus its investment activities on innovative technology companies, including those that may not normally do business with the Army.

A 19-year veteran of the technology-based economic development field has co-authored a guide that outlines strategies for growth in the knowledge-based economy. The Keys to Growth in the New Economy:Investing in Discovery, Engineering, and Entrepreneurship draws on the experiences of John Ahlen, who has led the Arkansas Science and Technology Authority (ASTA) since 1984. The report is co-authored by Mark Diggs, Chairman and CEO of Maryland-based Ontology Works, Inc.

Drawing on Arkansas' experience, Keys to Growth serves as a technology-based economic development handbook for policy makers and community developers who are looking for an approach to economic growth that does not rely on industrial recruitment.

Technology-based economic development offers a model for growth, Ahlen and Diggs argue. They outline five specific results that emerged from ASTA's experience:

Royalties on product sales from technology developed by Canadian and U.S. academic research institutions jumped to $845 million in 2001, up 12 percent from the previous year, according to the AUTM Licensing Survey: FY 2001. Gross licensing income received from licenses and options, however, declined from $1.26 billion in FY 2000 to only $1.071 billion in FY 2001 as 7 percent fewer new licenses and options were executed.

Prepared annually by the Association of University Technology Managers (AUTM), the survey is a comprehensive report featuring data about technology licensing activities collected from a record-high 198 U.S. and Canadian universities, teaching hospitals and research institutions.

Initial public offerings (IPOs), the darlings of the dot-com boom, would be put on the endangered species list if they were a plant or animal — based on how few have been seen in the past year. Investor sentiment toward IPOs has been almost as negative since the bubble burst as the IT hype was positive before. But is the aversion to IPOs warranted? Have IPOs really become more risky than they were in years past?

Stavros Peristiani of the Federal Reserve Bank of New York takes on the issue in his recent report, Evaluating the Riskiness of Initial Public Offerings: 1980-2000, and concludes yes, IPOs are more risky, but the blame cannot fully lie with the information and telecommunication technology explosion. Also, and perhaps more surprising for the tech-based economic development community, Peristani's models suggest "companies taken public by top-tier underwriters or funded by venture capital exhibit higher relative volatility and a lower likelihood of survival."

A bill that includes $20 billion for state fiscal relief was to be voted on by U.S. senators Thursday, according to the Federal Funds Information for States (FFIS), a joint subscription service of the National Governors' Association and the National Conference of State Legislatures.

Half of the $20 billion State Fiscal Relief Fund would come through an increase in the federal share of Medicaid. The remainder would be divided 60/40 between state and local governments if S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003, is enacted.

The $20 billion in fiscal relief, to be spread over fiscal years 2003-2004, could go toward education or job training, health care services, transportation or other infrastructure, law enforcement or public safety, and other essential government services.