Save State’s High-Tech Edge

It would take half a dozen median-priced houses in Hattiesburg, Miss., to equal the asking price for one of California’s equivalent dwellings. And budget-battered California can’t afford to match Hattiesburg’s offer to help finance manufacturing plants and laboratories for high-tech businesses that move into an “innovation and commercialization park” going up on 500 empty acres.

But if California hopes to keep small high-tech companies from moving to Hattiesburg’s high-tech industrial park, it must do a better job at matching the city’s other drawing cards -- increasingly important basic research being conducted at Southern Mississippi University’s polymer chemistry department and the united front that Mississippi’s congressional delegation presents when lobbying for federal grants that support high-tech research.

Obviously, Hattiesburg alone is not responsible for draining California of good, future-oriented jobs. But it is the small example that proves a much larger point. Santa Monica-based Milken Institute expects stronger economic growth in those cities, counties and states that “attract and expand science and technology assets and leverage them for economic development.” But the institute also reports that per capita spending on research and development by university engineering programs in California slipped to 21st nationally during 2003, down from 12th in 1997.

The slippage is fueled in large part by unprecedented budget deficits. But as soon as the financial pain eases, Sacramento must give first priority to state programs that nurture the small, cutting-edge companies that represent tomorrow’s high-paying jobs. The alternative is surrendering to raids by hundreds of job-hungry Hattiesburgs that dream of profiting by catching a ride on California’s high-tech heritage.

Hattiesburg recently lured away Fountain Valley-based Hybrid Plastics Inc., a pioneer in nano-composites, substances that are being incorporated into everything from agricultural products to electronics. The high-tech industrial park -- funded in part by a $2-million federal grant -- was part of the bait. But the company’s half a dozen PhD scientists also anticipate longer-term returns from an alliance with Southern Mississippi University’s polymer science program, now ranked as one of the nation’s strongest.

The loss of Hybrid Plastics is doubly painful because the company blossomed out of basic research conducted at Edwards Air Force Base and was nurtured by a $250,000 grant from CalTIP, a state program that financed promising high-tech companies. CalTIP fell victim to the Davis administration’s budget cutting, even though supporters argued that it generated $2.27 in business taxes for each dollar invested.

State funding for scientific and technological research and programs like CalTIP helped small companies turn big ideas into profitable ventures. To keep those companies and encourage new ones, restoring California’s high-tech edge is Job No. 1 as the economy begins to rebound.