Letter from the Editor

bridges vol. 22, July 2009 / Letter from the Editor

By Caroline Adenberger

Dear Reader,

What has happened to California Dreamin'? It seems to have turned into quite a financial nightmare. Two weeks ago, the once so golden state began issuing IOUs to its creditors because of California's current inability to meet its financial obligations with cash. Amongst the creditors are businesses, health clinics, college students, and taxpayers who are owed money by the state. California's financial situation is indeed severe; only twice before in the state's history IOUs had to be issued because of a shortage of cash flow. The first time was during the Great Depression and the second time was in 1992, when IOUs were issued to state workers during a budget crisis. This year, the world's eighth largest economy has to cope with a budget deficit of $26.3 billion (about 1.5 per cent of state gross domestic product), on revenues of just $113 billion.

Unfortunately, the urgently needed end is not yet in sight for the political stalemate between California's democratic and republican lawmakers who are infamous for their confrontational culture and hardliner positions of extreme left-wing and right-wing politics. California state law requires a balanced budget that must be passed by a two-thirds majority. In the California State Capitol, Republicans currently hold just over one third of the seats. And, while lawmakers continue their fight in Sacramento over tax increases versus spending cuts to balance the budget, institutions like the University of California (UC) have to figure out how to deal with the major financial constraints they are facing.

UC is one of the largest public universities in the US, with about 170,000 employees on ten different campuses. It has proposed salary cuts and furloughs for all faculty and staff members to help reduce a projected $800 million cut from the $3.2 billion in state funds over the next two years. The reductions would apply to all employees, no matter if their salaries are coming from state funds or other sources such as grants from federal funding agencies like NSF or NIH.

{access view=guest}Access to the full article is free, but requires you to register. Registration is simple and quick – all we need is your name and a valid e-mail address. We appreciate your interest in bridges.{/access} {access view=!guest} Many scientists fear this could present an opportunity for other Ivy League institutions such as Harvard or Stanford to lure away researchers with financially more attractive offers. Although UC has an excellent reputation for its scientific and academic achievements, faculty earns on average about a quarter less than its peers at top private universities. With regards to the student body, enrollment numbers have already been reduced, and tuition fees for the approximately 225,000 students at UC were raised by 9.3 per cent. The timing couldn't be worse: with a looming national unemployment rate of 9.4 per cent which threatens to continue to rise, many people turn to education as an alternative to unemployment during those challenging economic times.

Another example is the California’s Institute for Regenerative Medicine (CIRM ): its budget was authorized by Californians in November 2004 in a ballot called Proposition 71 . California’s government got the go-ahead by its constituents to raise $3 billion to finance CIRM’s stem cell research through the sale of state bonds. Back in the day, the concept proved successful when bonds met immediate demand. In October 2007, during a 2-day sale, individual investors alone bought bonds worth over $103 million.

Today, however, with California state bonds no longer in high demand, CIRM has to start thinking about additional sources for its future funding. According to its vice president for operations, John Robson, current operations at CIRM are not in acute danger but a financial squeeze is expected to hit in November this year. 

While the financial situation gives no reason to celebrate at research institutions in California as well as all over the United States, the scientific progress made in stem cell research certainly does: the first embryonic stem cells clinical trial in humans has been cleared by the US Food and Drug Administration (FDA) in January 2009 and is set to begin this summer.

California-based Geron , the trial’s sponsor, said it planned to enroll eight to ten patients in the Phase I study to assess the safety of its therapy, GRNOPC1 , being studied for patients with acute thoracic spinal cord injury. According to Geron, the potential product could mark the beginning of a new chapter in medical therapeutics, namely the restoration of organ and tissue function achieved by the injection of healthy replacement cells.

The discovery of induced pluripotent stem cells (iPSCs), which are adult cells genetically reprogrammed to be more embryonic-like, led to much excitement among the scientific community. According to Marius Wernig, an Austrian scientist who heads his own lab at the Institute of Stem Cell Biology and Regenerative Medicine at Stanford University, now every major institution or university in the US uses iPSCs because of its potential. In two in-depth portraits , bridges introduces both, Marius Wernig and his wife, Gerlinde Wernig, who also works at the Stem Cell Biology and Regenerative Medicine Institute in Stanford.

Another successful Austrian power-team in California is Roman Scharf and Daniel Mattes, the founders of JAJAH Inc. Their idea of a new form of Voice over Internet Protocol (VoIP) service became one of the most successful IT start-up companies of recent years. Originally based in Vienna, the company is now headquartered in Mountain View, in the heart of California’s famous Silicon Valley. Read the bridges feature article on how JAJAH got started and what triggered the move from Austria to the US.

In addition to the California focus in this issue, bridges reports on an interesting program called “The Science of Science Policy” at the US National Science Foundation (click here for article). In his column , Roger Pielke Jr. reflects on the results of a recent transatlantic workshop held in Helsinki, and Norman Neureiter analyzes President Obama’s recent Cairo speech and the boost it gave to international scientific cooperation, in his column focusing on science diplomacy.

A guest contribution from the Vienna Science and Technology Fund (WWTF) on its funding programs for promising young scientists; a report on the successful cooperation between the US National Institutes of Health (NIH) and the Technical University in Graz, Austria in biomechanics; and an interview with Norman R. Augustine, retired chairman and former CEO of the Lockheed Martin Corporation, on the state of science and engineering in the United States round out the current issue.

I wish you a pleasant summer and an enjoyable reading experience,

Caroline Adenberger
Editor

***


References


Krishna Guha “California state bills could grow into a federal headache”. In: Financial Times, July 13, 2009

Greg Miller “Budget Cuts: Proposal to Slash Salaries Riles California Researchers”. In: Science Vol. 325. no. 5936.

Greg Miller “Stem Cell Institute Looks for New Ways to Raise Cash”. In: Science  Vol. 323 no. 698b.

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