SSTI Digest

William "Sandy" White has been named president and CEO for the Columbus Technology Council.

During the past week, SSTI has made several additions to its website <http://www.ssti.org> that readers may want to note:

Editor's note: Few federal programs that fund research have undergone as much independent review and outside scrutiny as the Advanced Technology Program (ATP) within the National Institute of Standards and Technology and come out with high marks nearly every time. Yet two more independent papers described briefly below find that ATP funds make a positive difference for spurring innovation and commercializing technology. The program effects and encourages change that accelerates the development and adoption of technologies with large scale, national impact.

The Oklahoma Center for the Advancement of Science and Technology (OCAST) has provided the state an 8:1 return on its $78 million investment since 1993, according to From Concept to Commercialization, a new OCAST impact report, and accompanying press release. The state's leading organization for building a tech-based economy finds its client companies also have enjoyed a 90 percent survival rate.

Formed in 1987 by state government leaders, OCAST nurtures start-up companies in the biotechnology, telecommunications and manufacturing industries through a spectrum of financial and technical assistance programs that ranges from early research through commercialization. The center's impact report highlights the successes of some of these programs.

No region of the world encapsulates the aspirations of many metro and regional technology-based economic development programs as Silicon Valley, particularly to the benefits of having a cluster of technology companies feeding off of each other to the mutual benefit of all. The Valley was the global tech leader during the heyday of the IT boom, but is undergoing a tremendous structural shift since the dot-com bubble burst.

Area leaders point out the technology shift is just the latest chapter in the economic history of Silicon Valley — the move from defense business to integrated circuits in the 1970s, to personal computers in the 1980s, and to the Internet in the 1990s. As a result of the changes, Silicon Valley may become a model for other regions in how to prepare and negate the negative side of being cluster-dependent.

Massachusetts Governor Mitt Romney recently announced a plan to spur job growth in the state by tapping the expertise of area business, community and education leaders through Regional Competitiveness Councils. Six such councils will represent the Berkshires, Cape and Islands, Central, Northeast, Pioneer Valley and the Southeast regions of the state. The Greater Boston area, due its size and diversity, will be approached on a cluster basis by working through existing technology-focused organizations, such as the Massachusetts Biotechnology Council.

Each of the six councils is comprised of about 25 members from fields ranging from financial services and health care to manufacturing and tourism. In addition, key elected officials have been named as ex-officio members. The councils have been charged with a set of first tasks to perform, including:

Community buy-in to building a technology-based economy is vital for TBED success. Establishing a strong private sector commitment to science and technology can make a significant difference, particularly as elected officials are deciding what to cut or trim from the budget. TBED organizations use different approaches to get the buy-in. In states such as Massachusetts (see story in this Digest), the top-down direction from the Governor could provide the group critical access. Mississippi's grassroots approach to building tech councils, on the other hand, is designed to infuse a science and technology mindset throughout the state at the very local level — with a little financial and technical assistance from the state's lead TBED organization.

More than $4.7 billion of venture capital was invested in 524 private companies, according to Growthink Private Equity Funding Reports for the Fourth Quarter 2002. Companies securing investments numbered 30 less than the previous quarter.

Among major metropolitan areas, the San Francisco Bay Area continued to lead the nation with $1.43 billion in investments, or 30.5 percent of the nation's total, the Growthink data shows. Boston followed with $460.6 million (9.8 percent) and 58 deals, and Washington D.C., with 27 deals, was next at $274.3 million (5.8 percent). Dallas was the fourth leading metro area, where 15 companies raised $204.5 million.

The U.S economy experienced a turbulent year in 2001. However, small businesses demonstrated resilience and strength according to the Small Business Economic Indicators for 2001, a report released by the SBA Office of Advocacy. The February 2003 report states that although economic activity was sluggish in the months leading up to September 2001, economic output grew for the year as a whole.

In comparison to 2000, small businesses seemed to hold steady in 2001. The levels of employer firms and the self-employed were relatively consistent with previous year totals. While employer firm births showed a slight downward movement during the year and firm closures increased slightly, the most alarming number was the rise in business bankruptcies.

Congress Finished FY 2003 Budget Last Night

Congress wrapped up the Omnibus Appropriations Bill last night before recessing for the holiday weekend. The timing of the document's online release did not allow a complete review of the impact for tech-based economic development groups for today's Digest. Thanks, though, to assistance from the American Society of Mechanical Engineers, Association of American Universities and the Modernization Forum, SSTI does have numbers for selected elements of the Department of Commerce and the Small Business Administration.

Within the past hour, SSTI has learned that Congress zeroed out the $3.5 million for two programs that supported state SBIR/STTR technical assistance efforts. The omission of any mention in the FY 2003 Omnibus Appropriations Conference Report of funding for the Federal and State Technology Partnership (FAST) and Rural Outreach Program (ROP) was not a mistake in the draft as originally thought by the programs' proponents.

In FY 2002, FAST provided $100,000 matching grants to 27 state SBIR outreach and assistance programs. The ROP, which is targeted to those states that historically have under performed in the SBIR program, has provided support to 25 states since its creation only three years ago. Lists of recipients for both programs are available at: http://www.sba.gov/sbir/indexfast.html

In SSTI's final look at the 2003 State of the State Addresses and Inaugural Addresses, we find the importance of building technology-based economies continues to be emphasized by governors across the country, despite – or because of – the down economy. Below are excerpts from speeches given in Michigan, Minnesota, Oklahoma, Rhode Island and Texas.

Michigan

Governor Jennifer M. Granholm, State of the State Address, Feb. 5, 2003