[From CASE Reports, Vol. 12, No. 2, 1997]


Proposed R&D Funding Cuts Draw Academy Criticism

A recent proposal by the state administration calls for the elimination of funding for both the Critical Technologies Program at the University of Connecticut and the Yankee Ingenuity Program. Both programs provide state matching funds to stimulate university and industry research and development collaborations, and are funded through Connecticut Innovations, Inc. (CII). The Academy contributed to the original design of the Yankee Ingenuity program.

Responding to the proposed cuts, CASE President Anthony J. DeMaria recently sent a letter to the state's executive and legislative officials urging continued support of these programs. He cited their importance to the state's high technology industrial sector, and noted that the proposed cuts would further erode the state's already low national ranking in university R&D. funding:

In 1993, Connecticut had a peak in its funding for R&D at the state's universities. Even at this university R&D peak, Connecticut ranked 43rd in the nation as a percent of gross state product (Ref: Nexus Associates, Inc., information contained in a 1996 study they performed for Connecticut Innovations, Inc.). Since 1993, this investment level has been moving steadily downward. The currently proposed curtailment of funding for the two noted programs would reduce Connecticut's support of university funding for R&D essentially to zero. It would place Connecticut nationally in last place in state R&D funding for its universities.

State leaders who support economic growth through technology should consider whether this elimination of university R&D funding is truly a step in the direction of improving Connecticut's economy.

Dr. DeMaria went on to note the need to "maintain, create, grow, and attract into Connecticut high technology companies to create the high-paying jobs needed to replace the high tech jobs lost in the down-sizing of Connecticut's large defense industry. high tech companies are better able to pay high wages and high taxes and still be competitive in their global markets." While the Academy "applauds and supports efforts to reduce taxes," Dr. DeMaria cautioned that "it is important not to reduce the State's infrastructure that supports the creation, attraction, and growth of high tech companies within Connecticut."

"One of the most important infrastructures that attracts, creates, and grows high tech companies in a region is the R&D capabilities of the academic institutions within the region. It is well known that high tech industries tend to grow and develop within regions that have academic institutions that excel in R&D and graduate education. It is widely acknowledged that regions that have their fair share of high tech industries enjoy economic prosperity."

Arguing for continued funding support, Dr. DeMaria suggested that "growing the state's 'sunrise' high tech industries sector would nicely complement our still large defense industry, our strengthening financial sector, and our strong entertainment (gambling and tourism) industries," adding that "further growth of Connecticut's high tech sector, coupled with Connecticut's existing strengths would provide balance and additional protections against future economic downturns."

He concluded his letter with the following statement of the Academy's position:

"CASE believes that stopping the funding of the Critical Technologies Program and the Yankee Ingenuity Program is sending the wrong message to entrepreneurs, venture capitalists, financial institutions, and managers of high tech companies. This message is not encouraging them to remain, grow, create, or locate their companies in Connecticut. CASE believes this total absence of university R&D funding by the State needs to be corrected for the betterment of Connecticut."

-- Martha Sherman, Managing Editor

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