SSTI Digest

On February 26, President Bush issued a memorandum to 21 departments, agencies and other executive offices to create an Interagency Working Group on Federalism. The group is to: 



a) Identify initiatives that promote principles of federalism, such as: 

Release of the first solicitation of proposals for the new $3.5 million Federal and State Technology Partnership (FAST) has been delayed until the end of March, according to attendees of the National Small Business Innovation Research (SBIR) Conference held in Tulsa this past week. SSTI's March 1 presentation regarding FAST (a 16-slide Powerpoint file) is available by email request to skinner@ssti.org

The headlines of many tech and business publications scream of massive Internet incubator layoffs, closures, and restructuring. The rapid rise and fall of these organizations has left some local tech-based economic development practitioners wondering if encouraging the growth of incubator facilities is a worthwhile strategy to pursue. Closer scrutiny of the incubator phenomenon of the last few years, however, reveals many communities and states are increasing their investments in facilities to encourage technology start-ups at the same time for-profit incubators are closing. 

The National Science Foundation has published online the latest edition of the annual series: Science & Engineering State Profiles: 1998-99. By presenting one-page statistical summaries for each state, the District of Columbia, and Puerto Rico, Profiles provides rankings, state and US figures for easy reference across 30 science and engineering statistics as well as the distribution of federal R&D obligations by department and performer. 

With the 1994 School-to-Work Opportunities Act sunsetting this year and the increasing importance of developing a skilled workforce for a tech-based economy, many are asking if the initiatives launched or expanded by the Act have been successful. According to School-to-Work: Making A Difference in Education, a new report from the Institute on Education and the Economy at Columbia University, early results are encouraging, but there are areas for improvement given the opportunity presented by reauthorization. 



To prepare their findings the Institute reviewed the findings and conclusions of more than 130 local, state, regional, and national studies completed on School-to-Work programs. A complete bibliography is included at the end of the document. 



Accomplishments 

Two new Governors, Bob Wise of West Virginia and Wisconsin's Scott McCallum, have put tech-based economic development in the forefront of their respective economic agendas.



West Virginia

In his first State of the State Address, delivered February 14, and the Economic Development Plan released during his campaign for office, Governor Bob Wise outlined several tech-based economic development and education initiatives for the state to pursue immediately. He followed up the address by giving the state assembly several specific legislative proposals.



Governor Wise's proposals include:

The latest word in the national press regarding the FY 2002 budget President Bush will present to Congress next week suggests President Bush may propose significant cuts in investment in research and tech-based economic development. Many of the programs potentially under fire are instrumental to state and local efforts to promote stronger economic growth through science and technology.



A Feb. 15 story in the Wall Street Journal, "White House Is Planning Broad Cuts in U.S. Firm's Government Subsidies" reports the Office of Management and Budget has called business loan and grant programs for technology and economic development "corporate subsidies" that are "unjustified" and "low priority." The article singles out the International Trade Administration, the Overseas Private Investment Corporation, and parts of the Agriculture Department.

Stressing partnerships and flexibility, seven regional and national organizations have drafted an action agenda for the federal government to use to strengthen local and regional economic development efforts. After a brief introduction to the New Economy and its implications for local economic development, Partnership for Prosperity: A Federal Economic Development Policy Agenda includes several specific recommendations of interest to Digest readers:

Imagine President Bush using his entire State of the Union Address to present a $23 billion five-year strategy to encourage research, innovation, and entrepreneurship in the country. While it has not received much press in the United States, the equivalent happened when Australian Prime Minister John Howard gave his annual Federation Address on January 29.



Backing Australia’s Ability: An Innovation Action Plan for the Future is the Howard government’s comprehensive strategy to strengthen the Commonwealth’s position in the global economy. The five-year price tag to the government for the new initiatives is 2.9 billion Australian dollars (US equivalent is $1.56 billion). An additional $6 billion ($3.23 billion US equivalent) in private investment is expected to be generated from the plan. In 2000-01, the country of only 19.3 million people spent $4.5 billion ($2.43 billion U.S. equivalent) on research and innovation programs.

The past decade’s economic boom has masked some serious cracks in the foundation of U.S. competitiveness– and it will take a strong policy of local and regional “innovation stimulus” to get the country back on track, says the Council on Competitiveness in U.S. Competitiveness 2001: Strengths, Vulnerabilities and Long-term Priorities.



The report, co-authored by Michael Porter, a Harvard Business School professor and leading proponent of cluster-based economic development strategies, and Debra van Opstal, senior vice president at the Council, is one of a growing number to recognize the important role regional development organizations must play in future national innovation and competitiveness policy.



While the report highlights the role of innovation as a source of U.S. competitive advantage and a driver of productivity and growth, it warns of the implications of the drop in public investment in research and innovation as a share of national wealth during the past decade.

President Bush is expected to release his first budget at the end of the month, and a published report indicates at least one tech program might be slated for significant cuts. The Wall Street Journal in a February 16 article ("Bush Aims to Reduce Digital Divide Funds") reported that their sources indicate the U.S. Department of Commerce's Technology Opportunities Program (TOP) may be slashed 65 percent from $42.5 million to $15 million.



Established in 1994, TOP promotes the widespread availability and use of digital network technologies in the public and non-profit sectors. As part of the Department's National Telecommunications and Information Administration (NTIA), TOP gives matching grants for model projects demonstrating innovative uses of network technologies. Recipients include state, local and tribal governments, health care providers, schools, libraries, police departments, and community-based non-profit organizations

In what could be the largest private sector commitment yet to a single industry/university research center, Corning, Kodak ,and Xerox have combined to pledge a staggering $45 million toward establishing a Center of Excellence in Photonics and Optoelectronics in Rochester, N.Y. The three corporate giants also committed to help raise another $30 million from other private sector companies for the new partnership involving New York State, higher education, and private enterprise. University partners include the University of Rochester, the Rochester Institute of Technology, the University at Albany, Rensselaer Polytechnic Institute, Alfred University, and Cornell University.