By Jeffrey Selingo

When California voters passed a $3 billion ballot initiative in November to pay for stem-cell research, little did they know that they would ignite a firestorm of copycat measures in statehouses across the country. In the months after the initiative was approved, lawmakers in Wisconsin, Illinois, New York, and New Jersey, among others, proposed their own stem-cell research programs, worth up to $1 billion, out of fear that scientists at their universities would follow the money and head west.

The state efforts were aimed at trying to fill a void left by the federal government in 2001, when President George W. Bush restricted funds from the National Institutes of Health for stem-cell research. "We can't just sit around and wait for the administration to change its policy," said Lawrence S.B. Goldstein, a neurobiologist at the University of California—San Diego, last fall during the campaign for the stem-cell initiative. "At some point, the states have to take the lead in this area."

And not just on stem-cell research. Frustrated by the slow growth in federal research funds and the inability of their small universities to snag a bigger piece of that federal pie, states are increasingly becoming more aggressive about providing their own dollars for research.

To be sure, the state dollars are still small compared with what the federal government provides, and most of the state money is geared toward applied research that can pay economic dividends rather than the basic research the federal government tends to fund. Even so, the trend of states taking the lead in setting research priorities concerns some scientists, including engineers, who worry that state lawmakers may be interested only in current fads, such as stem-cell research, as well as quick results.

"The federal government tends to take the long view on research," says B. Jayant Baliga, a professor of electrical engineering at North Carolina State University. "States have less patience, so there is a danger that if something good is not coming out of the research they are funding, they will give up after a few years."

Case in point: The Microelectronics Center of North Carolina (MCNC). Founded by North Carolina in 1980 in Research Triangle Park, the center was created to help attract the semiconductor industry to the state, which at the time was reliant on manufacturing. The state invested more than $200 million in the center but was never successful in luring semiconductor companies. "We did bring in a lot of companies in related fields, like IBM," Baliga said. "But in the end, the state came to the conclusion that the center was not sufficient to attract what it wanted."

So about five years ago, the MCNC was spun off into an independent entity free of any state control and, of course, public dollars. "I was using it for my research, and they cut us all off," Baliga said.

Not only is the federal government likely to stick to a research agenda for the long haul, but Baliga and other experts say federal agencies are better able than states to ensure that the wealth is spread around. "States have to balance their budgets, so they can't just pour money into losing efforts," says Bill Drohaun, executive director of the Association of University Related Research Parks, which in many places are incubators for state research programs. "The federal government runs a deficit, so it can take more chances on research."

While there is a lot of disagreement among scientists about the fairness of how federal agencies dole out their money through the peer-review process—which some believe favors more established institutions with vast research facilities and big budgets—even critics concede that in the end, small states have the capacity to conduct research only because of the federal government's investment.

But when states take the lead in funding research, the spoils are more likely to go to the big states with their large budgets. One example is California's $3 billion stem-cell initiative. Another is a deal New York has put together over the past several years that has siphoned some $850 million dollars for nanoscience research at the State University of New York—Albany.

The effort began in 2001, when IBM and New York agreed to spend $150 million dollars to upgrade facilities. The following summer, International Sematech, a consortium of 12 semiconductor makers, pledged to spend $193 million over five years to build a center that would research faster microchips. After the state agreed to put forward another $210 million, Tokyo Electron Ltd., a Japanese company that builds tools used to make microchips, said it would build its own research center in Albany.

The infusion of cash led state officials to dream that Albany would become the next Austin, Texas, where an economic boom was spurred in part by Sematech's decision in 1988 to locate its headquarters there.

Game Plan

"Companies looking to establish R&D and manufacturing are getting aggressively wooed by government and business entities that fully understand the benefits of each economic expansion opportunity," says Alain E. Kaloyeros, the vice president and chief administrative officer of the College of Nanoscale Science and Engineering at Albany, who played a key role in the Sematech deal. "Without a statewide or regional economic development strategy, you can't even be in the game."

But some researchers question whether SUNY-Albany should even be in the game at all. The institution is improving its facilities, but they note it could take years before Albany is able to attract top-notch graduate students and professors who now flock to places like the Massachusetts Institute of Technology or the University of California—Berkeley. "The federal government would never give Albany this amount of money because it knows they don't have the capacity yet," says an electrical-engineering professor at a California university who has reviewed projects at Albany and wishes to remain anonymous.

Kaloyeros admits that Albany is not an "established institution with decades worth of national lobbying exposure," but with the infusion of state dollars he hopes to one day join those ranks. "The best long-term strategy is one that involves both state and federal funding," Kaloyeros says, "since the resources are so much greater on the national level."

At least for now, President Bush's budget for science in the 2006 fiscal year provides only slight increases for the National Science Foundation and cuts for several other agencies that pay for research in the physical sciences and engineering. Spending for basic research in all would fall by 1 percent. That comes despite calls from several bodies, including the president's own science advisory panel, for significant increases in federal support for the physical sciences.

As a result, states like California and New York that have the financial resources are striking out on their own. That worries some like Dan Berglund, president of the State Science and Technology Institute, a nonprofit group. For one, state lawmakers usually shun providing funds for basic research because it fails to create new industries and jobs. "When you talk about things that you can't see any tangible economic benefit from—the Hubble Space Telescope, for example—it makes sense for the feds to pick up the tab," Berglund says.

What's more, unlike the federal government, which coordinates its research agenda among agencies and sets priorities, states are more prone to do what their neighbors are doing or what will provide the quickest economic stimulus. That's what is now happening with stem-cell research, Berglund says. "There is a void, and California is filling that void," he says. "There is strong potential that California will suck all stem-cell activity out of other states and move it there. From a national perspective, it's not good to have an entire industry focused in a particular state."

Which is why other states are trying to copy California's effort. But at some point, Drohaun, of the Association of University Related Research Parks, said states could end up providing too much money to the nascent field of stem-cell research and simply copy each other's efforts without adding much value. At the same time, they could ignore other research that's important to their future economic development.

"This is where the federal government does a good job," Drohaun says. "The federal agencies make sure that spending is not out of whack with our national priorities. The haphazardness with which some states are spending research money is akin to the federal government saying it's going to move all the money it's spending on cancer research to stem cells."

Indeed, Berglund laughs at all the states trying to duplicate the research agenda of neighboring states, whether it's stem cells or nanosience. "It's all about keeping up with the Joneses," he says. "If you don't have a competitive advantage already, it doesn't make sense for you to throw $10 or $15 million in the hopes that you will."

Jeffrey Selingo is a freelance writer based in Washington, D.C.