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					                   CCST’S SECOND DECADE:
                   S TA R T I N G S T R O N G

                   T    his year the California Council on Science and Technology began
                        its second decade. It is a time when the “California Miracle,” our
                   state’s booming high-tech economy, is widely regarded as one of the
                   world’s economic marvels. California leads the nation in venture cap-
                   ital investments focused on advanced science and technology. The
                   state is both a cradle of innovation and a magnet for the best and most
                   creative thinkers.
                   Just as California is a world leader in scientific and technological
                   innovation, CCST is quickly becoming the state’s premier science and
                   technology advisory body. In many key areas, CCST is working with
                   leaders in government, industry, and education to shape science and
                   technology policy to ensure the state’s leadership in the face of
                   increasing worldwide competition.
                   This report highlights CCST’s accomplishments in the past year, which
                   have helped establish the organization as an important player in plan-
                   ning for California’s future economic needs. All of CCST’s projects
                   and programs are closely aligned with its mission of serving as the
                   state’s foremost independent and unbiased advisory body on science
                   and technology issues.
                   CCST is helping the state to look beyond today’s economic miracle
Paul C. Jennings   by examining some of the most challenging questions facing decision
 Council Chair     makers. These include:
                        In what ways can state government support scientific and
                        technological research, development, and dissemination?
                        How can California position itself to optimize sustainable
                        economic growth while at the same time taking into account
                        environmental concerns and quality of life issues?
                        How can California leaders effectively address the need for a
                        workforce that is scientifically and technologically prepared to
                        develop and sustain the innovations of the future?
                   Addressing these questions will be critical to California’s economic
                   health and well-being. We are confident that CCST will continue to
                   offer carefully considered answers and policy recommendations based
                   on the most authoritative research, knowledge, and expertise.




 Karl S. Pister
 Board Chair
1999–2000 Annual Report




       California Council on
      Science and Technology
                    J U LY 2 0 0 0




 C R E AT I N G A N E W V I S I O N F O R S C I E N C E
    AND TECHNOLOGY IN CALIFORNIA
                                         INTRODUCTION
                                         T    he California economy continues to surpass those of other
                                              states and many countries. Science and technology are at the
                                         heart of California’s success. The percentage of Californians in
                                         high-tech jobs is nearly twice the national average. Annual wages
                                         in high-tech jobs are more than $60,000, approximately double
                                         those of other non-farm industries. California leads the world in
                                         the investment of high-tech venture capital.

                                             T H E PA S T Y E A R
                                         The mission of the California Council on Science and Technology
                                         is to help California’s leaders sustain the state’s economic health
                                         and well-being by providing research-based information for
                                         effective policy making, planning, and decision making.
                                         The past year represented significant progress for CCST. During
                                         1999-2000, CCST took the lead in addressing key science and
                                         technology issues. The year’s accomplishments include:
                                         • California Report on the Environment for Science and
                                           Technology (CREST). A compilation of eight individual
                                           research projects, CREST provided the first overall assessment
                                           of the present status and long-term trends affecting California’s
                                           science and technology infrastructure. It represents a critically
                                           important step toward effective planning for decisions and
                                           strategies that will affect California’s economic future.
                                         • S&T Week. Gov. Gray Davis proclaimed November 14–20,
                                           1999, Science and Technology Week. CCST initiated and
                                           organized a series of events in San Jose, Los Angeles, and
“CCST is an extraordinary                  San Diego that brought together industry leaders, academic
resource for California.                   researchers, educators, and government officials to discuss the
                                           state’s S&T infrastructure. Supported by a joint resolution
I’ve been particularly                     introduced by Senator John Vasconcellos (D-San Jose), S&T
pleased with the effective                 Week coincided with the publication of the CREST report.
working relationships and                  The success of S&T Week prompted the legislature to make
close connection CCST has                  it an annual event.
developed with California’s              • PIER Report. CCST released a report on the state’s Public
legislators and state agen-                Interest Energy Research (PIER) program, which was delivered
                                           to Gov. Gray Davis and the state legislature in March 2000. The
cies over the past year.”
                                           report, requested by the legislature, is a comprehensive review
 —Susan Hackwood, Executive Director       of the state’s annual $62 million energy research
         California Council on Science     program. An independent expert review panel that included
                       and Technology      seven CCST Fellows produced the report. CCST nominated the
                                           12-member panel and managed the review process. The report
                                           has had a positive impact on the PIER program, and the PIER
                                           review process is a model for future CCST research and review
                                           efforts for the state government.




                                                      2
• Fellows. During the past year CCST added 17 new names
  to its roster of CCST Fellows, expanding the total number
  of distinguished experts in a variety of scientific and
  technological fields to 89. Among these are:
    28 National Academy of Science members
    34 National Academy of Engineering members
    6 Institute of Medicine members
    7 National Medal of Science recipients
    1 National Medal of Technology recipient
    6 Nobel Laureates
 Increasingly, decision makers in Sacramento are recognizing the
 invaluable body of knowledge and expertise the CCST Fellows
 offer. The Fellows’ and CCST’s role in the Public Interest Energy
 Research (PIER) report has led to new inquiries from other state
 agencies for technical assistance.
• Council and Board Meetings. CCST’s council and board
  meetings featured an array of guests—legislators, S&T experts,
  business and industry leaders, and academics—who enlivened and
  enriched CCST’s continuing dialogue on science and technology
  issues. Topics of meeting presentations and discussions ranged
  from strategies for improving the state’s K–12 educational system
  to taxes on e-commerce to concerns about genetically modified
  foods.
                                                                            “CCST is a uniquely valuable
     CCST’S ROLE           IN   S U S TA I N I N G I N N O VAT I O N        organization because it’s a gath-
California has become a major world center for research and devel-          ering of great minds. The genius
opment in electronics, computers, software, the Internet, telecom-          of CCST is that it’s a council
munications, and the biomedical and biotechnology industries.               rather than an individual like a
In each case, the state’s major research universities, its four-year col-   high-level science adviser.”
leges, and its two-year community college system have played a key                —Congressman Sam Farr (D-Carmel),
role in scientific and technological innovations and the                           who, while serving in the California
creation and growth of California’s new industrial sectors.                              legislature, co-authored the
                                                                                                bill that created CCST
The potential for innovation and the growth of new areas of
economic activity in California are directly related to the health of
the state’s research and development infrastructure. That, in turn,
depends to a great extent on California’s education and training
capabilities. These two areas of concern are increasingly a focus of
CCST’s studies and initiatives.




                                                         3
                   CCST’S STRUCTURE
                    E    stablished by the state legislature in September 1988, CCST
                         is an independent, nonprofit partnership that brings together
                     leaders from industry, government, and academia. CCST’s basic
                     mission is to identify and advise on ways in which science and
                     technology can be used to improve California’s economy and
                     quality of life.
                     Sustaining Institutions. Central to CCST since its inception have
                     been the support and resources provided by CCST’s sustaining
                     institutions: the University of California System, the California
                     Institute of Technology, Stanford University, the University of
                     Southern California, the California State University System,
                     and the California Community Colleges.
                     Board and Council. Two internal groups offer guidance to CCST:
                     the council and the board of directors. The council, which meets
                       three times a year, is made up of 30 corporate CEOs, academi-
                          cians, scientists, and scholars of the highest distinction who
                             volunteer their time to ensure California’s pre-eminence
                               in science and technology. The board, which meets
                                 twice a year, is currently comprised of 12 leaders from
Government                        industry and CCST’s sponsoring academic
                                   institutions. The two groups have distinct functions.
                                    While the board has full responsibility for oversight
                                    and direction of CCST, the council is involved in
                                     specific CCST projects, is divided into
                                     subcommittees with responsibilities in specific
                                     areas of CCST’s planning and project
                   Industry          development, and is responsible for carrying out
                                     CCST’s actual work and research.
                                      Fellows. The CCST Fellows are a select group of
                                     technical experts who serve on a voluntary basis at
                                    the invitation of the council and board and who
                                  meet as needed to address specific projects.
                                 Representing the pinnacle of their profession, the
                                Fellows have been selected because of their high degree
       Education              of scientific and technical expertise. The Fellows are an
                            invaluable resource upon which CCST and the state
                        government can draw as new projects and issues emerge.
                     Initiated in 1997 with 51 members, the Fellows program added
                     17 new members in 1999–2000 to reach a total of 89.
                     Staff and Offices. Overall and day-to-day leadership for CCST is
                     provided by the Executive Director, Dr. Susan Hackwood. She
                     and her staff are located in two offices. One is in Southern
                     California adjacent to UC Riverside, and the other is one block
                     from the Capitol in Sacramento.




                                  4
C R E S T:
CALIFORNIA REPORT ON THE ENVIRONMENT                                             KEY FINDINGS FROM CREST
FOR SCIENCE AND TECHNOLOGY


    I n an era of growing competition within the global
       economy, does California have the potential workforce,
    the capital investment, and the necessary governmental
                                                                              Area/Topic           CREST Key Findings

                                                                              Overall S&T Effort Outstanding level of activity,
    policies to sustain its “miracle” economy and its climate of                                 but not all elements of the
    scientific and technological innovation? This was the main                                   S&T infrastructure are
    question addressed by a multifaceted, two-year study                                         adequate for future growth
    organized and carried out by CCST that culminated in
    November with the publication of the California Report on
                                                                              High-Tech Industry High level of R&D invest-
    the Environment for Science and Technology (CREST).
                                                                                                 ment; however, there is a
    The first comprehensive assessment of the state’s S&T                                        need for increased partner-
    indicators, CREST draws on extensive research and                                            ships between industry and
    analysis and offers recommendations for how industry                                         academia in order to expand
    leaders, academic planners, and state policy makers can                                      basic research in California
    respond more effectively to a high-tech economy. CREST
    addresses the absence of a regularly executed strategic                   Academic Research Essential engine for innova-
    planning process for the California economy by providing                                    tion, excellent quality, but
    essential information upon which strategic and tactical                                     California is losing ground
    decisions can be based. Because of CCST’s leadership in                                     to other high-tech states
    developing CREST, for the first time in California factors                                  in commercially crucial
    that are essential to the state’s economic health and                                       technology fields
    well-being have been clearly quantified and analyzed. To
    develop CREST, CCST identified 11 experts to head eight                   State Science and    State R&D programs and
    research projects who gathered and analyzed data on:                      Technology Policy    R&D tax credit need
    • Federal, state, and industry R&D expenditures                                                strategic focus

    • Science and technology research at California’s                         Federal Labs         A major asset: better use
      universities and federal laboratories                                                        should be made by state
    • California’s R&D tax credit                                                                  government and industry

    • Private foundation support                                              Foundation Support Opportunity to involve
    • Venture capital                                                                            foundations in California
                                                                                                 S&T effort
    • The preparation of K-12 students to work in the
      high-tech sector                                                        Venture Capital      World leader in venture capi-
                                                                                                   tal investments; opportunity
                                                                                                   to consider other early-stage
                                                                                                   funding methods for selected
                                                                                                   technology areas and small
                                                                                                   start-up companies

                                                                              Labor Force          Essential to improve K-12
                                                                                                   education, expand teacher
                                                                                                   education programs in CSU
                                                                                                   and UC, and focus
                                                                                                   California Community
                                                                                                   Colleges and others on the
                                                                                                   expansion of lifelong learn-
                                                                                                   ing and skill development

    CSU Los Angeles President James M. Rosser with engineering
    and technology students and the third in a trilogy of solar-powered
    electric vehicles built and raced by Cal State L.A. students
    since 1990. Rosser is also a CCST Fellow and Council Member.

                                                                          5
                                                                  THE CREST FINDINGS: AN OVERVIEW
                                                              The CREST report clearly demonstrates the importance of
                                                              high-tech industry to California’s economy and its people.
                                                              According to the report, in California 9.3 percent of all jobs are
                                                              in high-technology industries, far above the national average of
                                                              5.6 percent. Average annual wages in high-technology industries
                                                              are more than $60,000, roughly double the average pay in all
                                                              private, non-farm industries. Research and development sustain
                                                              these industries, and here again California leads the nation,
                                                              with 20 percent of the nation’s R&D, compared to 12 percent of
                                                              the country’s population and 13 percent of the U.S. Gross
                                                              Domestic Product.
                                                              Nevertheless, the economic miracle is not benefiting all
                                                              Californians. CREST also found that:
                                                              • A significantly growing number of Californians do not have the
                                                                educational preparation to enable them to benefit from
                                                                job opportunities created by high-tech companies.
                                                              • The number of Californians being educated with the skills
                                                                necessary to meet employer needs is insufficient.
“CCST is one of the few organiza-                             • Many Californians graduating from K–12 and community
tions in California that has the                                college systems are not adequately prepared to enter the
                                                                high-tech workforce.
ability to ask tough questions and
provide critical long-term thinking                           To address these problems, CREST recommended specific actions
to ensure that we’re examining                                that can be taken by the state government, industry,
                                                              and academia. Principal among these are:
the system of innovation in
California.”                                                  • State government must take a leadership role in sustaining
                                                                California’s high-tech future by supporting the science and
                 —Joe Raguso, Deputy Secretary
                                                                technology infrastructure, by setting priorities in its R&D,
  Division of Science, Technology, and Innovation
                                                                and by coordinating its research policies.
          California Trade and Commerce Agency
                                                              • The problems of K–12 education must be addressed; K–12
                                                                classroom instruction and teacher training programs must
                                                                enhance and expand emphasis on science and math education.
                                                              • Science and technology education in community colleges and
                                                                in the state’s colleges and universities must be expanded.


Scripps Institution of Ocenography’s research vessel is
deployed into the Santa Barbara Channel to monitor currents
and coastal conditions.




                                                                           6
    REACTIONS         AND    FOLLOW-UP        TO   CREST
Beginning with the publication of the CREST report in November
and continuing into 2000, leaders from government, industry,
and academia from throughout California have gathered to
discuss the implications of its findings and develop
specific plans for action and follow-up. Perhaps most important,
CREST has provided California’s decision makers with a new
sense of urgency about the issues confronting the K-12
educational system and the need to develop a highly skilled and
competent workforce.
State Senator John Vasconcellos underscored the challenges
revealed by CREST. “As the legislature continues to pursue
comprehensive reform and improvement of our K-12 education
system,” he said, “the report helps us focus our attention on the               “The CREST report for the first
importance of preparing each and all of our children with the                   time frames the relationship
capacities needed for careers in science and technology. If our
students aren’t ready for these jobs, we lose our competitive edge,             between California’s science and
and companies will be encouraged to locate elsewhere.”                          technology infrastructure and the
CCST has pursued several different activities that stem directly
                                                                                state’s competitiveness, both
from the CREST findings. They include:                                          nationally and internationally. It
                                                                                offers a blueprint for change and
• Stepped-up Leadership for S&T in Sacramento. CCST has been
  actively involved in discussions with state legislators and key               improvements, particularly in
  agency staff about the desirability of creating a cabinet-level               the area of public education and
  secretary of technology position. Following up on the success of              the preparation of California’s
  the first S&T Week in November, the legislature voted in March
                                                                                labor force.”
  2000 to make California’s Science and Technology Week an
  annual event. In a bold move, Gov. Gray Davis committed $75                                       —William Bold, Vice President
  million annually for three California Institutes for Science and                                Government Affairs, QUALCOMM
  Innovation at three University of California campuses. These
  institutes are another indication of the growing awareness of
  California’s S&T infrastructure needs. They are the first of their
  kind in the country and represent the state’s most significant
  investment in S&T research and development. The purpose of
  the institutes is to combine technological and scientific research
  and training in both public and private California research
  universities and to educate future scientists and technological
  leaders.

                                                               One of the instruments used in the Lawrence Berkeley National
                                                               Laboratory’s Advanced Light Source, a national user facility that
                                                               generates intense light for scientific and technological research.




                                                     7
                                     • Addressing the S&T Workforce Gap. A major finding of the
C R E S T P R I N C I PA L             CREST report was that California is not producing the science
I N V E S T I G AT O R S               and engineering workforce needed to continue meeting
                                       industries’ growing requirements for skilled workers.
Robert C. Calfee                       Therefore, CCST is moving forward with a study that will
Dean                                   provide data on the trends in science and engineering education
School of Education                    at the high school, associate, baccalaureate, masters, and
UC Riverside                           doctoral levels, taking into account population growth,
Cecilia A. Conrad
                                       demographics, and changes in employment patterns. For the
Associate Professor of Economics       first time, this study will bring together data from multiple
Pomona College                         sources and integrate them into a single “critical path” model.
                                       The study will:
Jeffrey I. Chapman
Professor of Public Administration           • Define and quantify the workforce and skills gap
University of Southern California
                                             • Identify critical elements in the state’s education
Linda R. Cohen                                 system that control the S&T workforce supply
Professor of Economics
                                             • Determine how the state’s education system can better
UC Irvine
                                               prepare students for jobs in science and technology
Michael R. Darby
Professor                            • Meetings with Congressional Representatives. In April, a
Graduate School of Management          contingent of CCST council members, Fellows, and staff met
and Department of Economics            with 32 California legislators in the nation’s capital to brief
and Policy Studies                     them about CREST. Representatives Ken Calvert and Sam Farr
UC Los Angeles                         hosted a Congressional reception to introduce the CREST
                                       report, acknowledging its importance and the basic message
Sandra A. Glass                        that sustaining California’s climate for innovation will require
Philanthropy Advisor                   continuing support from the federal government.
Bronwyn H. Hall                      • International Interest in CREST and CCST. Since its publica-
Associate Professor of Economics       tion, CREST has attracted attention from other countries as
UC Berkeley                            well. Latin American leaders, for example, have asked CCST for
Michael T.K. Horvath                   advice in designing their own CREST-like studies. CCST staff
Assistant Professor of Economics       have pursued discussions with representatives of both Mexico
Stanford University                    and Costa Rica, and a process to evaluate S&T innovation in
                                       the state of Baja California is under way. Australian leaders who
Victoria Koehler Jones                 attended the CCST Congressional reception in April also have
Principal Consultant
                                       expressed interest in creating an organization similar to CCST in
Time Structures
                                       their country.
Patrick H. Windham
Consultant
Lynne G. Zucker
Professor of Sociology and
Policy Studies
UC Los Angeles




                                                  8
SCIENCE AND TECHNOLOGY WEEK
  C   CST and California’s science and technology infrastructure
       took center stage when Gov. Gray Davis proclaimed
  November 14-20, 1999, as California’s first Science and
  Technology Week. Designed to coincide with the publication of
  the CREST report and to highlight the report’s findings, S&T
  Week featured a series of events in San Jose, Los Angeles, and San




        Guillermo Fernandez de la Garza, executive director of the
        United-States Mexico Foundation for Science, speaking to
        reporters from a Spanish language television station after
        an S&T Week event in San Diego.                                “In order to maintain our
  Diego that brought together industry leaders, government             economic advantage, the public
  officials, academic researchers, and educators. In addition to       and private sectors should
  meetings about maintaining California’s high-tech leadership,        work together to ensure that
  leaders from California, Mexico, and Costa Rica met to discuss
                                                                       Californians continue to receive
  the benefits of cross-border partnerships. CCST sponsored
  and organized all of the week’s events. S&T Week received            the training necessary to compete
  substantial television, radio, and newspaper coverage                successfully for high-tech jobs.”
  throughout the state.                                                        —Gov. Gray Davis, from proclamation
                                                                                           establishing S&T Week
  Gov. Davis gave S&T Week an enthusiastic kick-off by
  appearing at the first statewide Aerospace Summit in Los Angeles.
  Davis presented a strategic plan for the future of California’s
  aerospace industry and emphasized the need for federal legisla-
  tion to promote aerospace investments. As part of the event, the
  Governor presented awards to several K–12 students identified
  and selected by CCST who have excelled in math and science.
  Perhaps the most important outcome of S&T Week was the
  interest and awareness it generated in the role of science and
  technology in sustaining California’s economy. The week was so
  well-received that the state legislature has passed a resolution
  making it an annual event.




                                                            9
PUBLIC INTEREST ENERGY
RESEARCH PROGRAM

F   or CCST, 1999-2000 was a year of major studies that, upon their
    release, began to have an impact on California’s S&T policies and
planning. In addition to CREST, CCST managed an independent
review of California’s Public Interest Energy Research (PIER) program.
Seven of the 12 PIER review panelists were CCST Fellows.
After California’s electric services industry was restructured in
1996, the PIER program was established in January 1998 to
conduct energy research, development, and demonstration
(RD&D) projects in the public interest. The industry’s
restructuring reduced public interest RD&D activity by
California’s utility companies. However, PIER offered new
opportunities for public interest energy RD&D. The legislature
authorized no less than $62.5 million annually for the program
through December 2001. As of December 1999, the California
Energy Commission (CEC), the administering agency, had
awarded $101.6 million under the PIER program.
In December 1998, CCST was invited to establish an independent
panel to review the PIER program, study its public value, and
prepare a report to the Governor and the state legislature. The report
was delivered to the Governor and the legislature on March 20,
2000. CCST helped to nominate the panel and managed the review
process. Technical analysis for the panel was provided by the RAND
Corporation, a nonprofit institution that helps improve policy and
decision making through research and analysis.

     T H E PIER    PA N E L ‘ S M A J O R F I N D I N G S I N C L U D E D :
• Energy-related issues are important enough, both nationally
  and to California’s unique interests, to warrant a targeted,
  effective energy RD&D program. California’s energy
  infrastructure faces serious challenges, but the state has the
  intellectual and economic resources to address those challenges
  through a well-managed, high-quality RD&D program.
• To ensure the future success of the PIER program, either the
  program’s autonomy and flexibility within the CEC should be
  increased or it should be located within an external organization.

     F R O M R E C O M M E N D AT I O N S     TO    ACTION
The PIER report’s release prompted the legislature and the CEC to
move quickly to address the panel’s recommendations. State leaders
have taken the following steps to improve the PIER program’s
effectiveness:
• Legislation was drafted that incorporated many of the
  panel’s recommendations.
• The CEC made changes to the program’s management
  based on the panel’s recommendations.
• The panel will continue to assess how well the PIER
  program is administered and measure outcomes for
  continuing PIER projects.
• A final report will be delivered to the Governor and the
  legislature in March 2001.

             10
P I E R PA N E L I S T S
The panel members were selected because of their expertise in
areas needed to evaluate the PIER program and their broad expe-
rience in RD&D program management and execution.
The panelists were:
 Harold M. Agnew
 Retired President, General Atomics
 Past Director, Los Alamos Scientific Laboratory
 CCST Fellow
 Richard E. Balzhiser
 Retired President and Chief Executive Officer
 Electric Power Research Institute, Inc.
 CCST Fellow
 Patricia A. Buffler
 Professor of Epidemiology and Public Health
 School of Public Health, UC Berkeley
 Linda R. Cohen
 Professor of Economics
 UC Irvine
 CCST Fellow
 John S. Foster, Jr.
 Consultant, TRW, Inc.
 Retired Director, Lawrence Livermore National Laboratory         “This effort by CCST continues
 CCST Fellow
                                                                  the tradition of effectively helping
 T. Kenneth Fowler                                                government agencies assess and
 Professor Emeritus
 Department of Nuclear Engineering, UC Berkeley
                                                                  analyze their internal programs
 CCST Fellow                                                      and long-term science and
 Fred W. Kittler
                                                                  technology intiatives.”
 Co-founder and Principal                                               —Paul Jennings, CCST Council Chairman
 Velocity Capital Management
 Peter M. Miller
 Scientist
 Natural Resources Defense Council, Inc.
 Esteban Soriano
 Vice President for University Advancement
 California State Polytechnic University, Pomona
 James L. Sweeney
 Professor of Management Science and Engineering
 Stanford University
 CCST Fellow
 Mary L. Walshok
 Associate Vice Chancellor of Extended Studies
 and Public Programs
 UC San Diego
 Carl J. Weinberg
 Principal
 Weinberg Associates
 CCST Fellow



                                                   11
NEW CCST FELLOWS ELECTED IN 1999-2000

  Richard E. Balzhiser                        Charles F. Kennel                           Lucy Shapiro
  Retired President and CEO                   Vice Chancellor of Marine                   D.K. Ludwig Professor of Cancer
  Electric Power Research                     Sciences and Director                       Research in the School of
  Institute, Inc.                             Scripps Institution of                      Medicine
  Palo Alto                                   Oceanography                                Department of Developmental
                                              UC San Diego                                Biology
  J. Michael Bishop, M.D.                                                                 Stanford University School of
  Nobel Laureate and Chancellor               Mark D. Levine                              Medicine
  UC San Francisco                            Director, Environmental Energy
                                              Technology Division                         Robert N. Shelton
  Arthur N. Chester                           Lawrence Berkeley National                  Vice Provost for Research
  President                                   Laboratory                                  University of California
  Hughes Research Laboratories                                                            Oakland
  Malibu                                      Johnetta MacCalla
                                              CEO                                         Cornelius (Neal) W. Sullivan
  Michael R. Darby                            ASCI, Incorporated                          Vice Provost for Research
  Warren C. Cordner Professor of              Irwindale                                   University of Southern California
  Money and Financial Markets
  John E. Anderson Graduate                   J. Fernando Niebla                          James L. Sweeney
  School of Management                        President                                   Professor
  UC Los Angeles                              International Training Partners             Department of Management
                                              Orange                                      Science and Engineering
  Lewis L. Judd, M.D.                                                                     Stanford University
  Mary Gilman Marston Professor               Elisabeth Paté-Cornell
  of Psychiatry and Chair                     Burton and Anne McMurtry                    Carl J. Weinberg
  Department of Psychiatry                    Professor and Chair                         Principal
  School of Medicine                          Department of Management                    Weinberg Associates
  UC San Diego                                Science and Engineering                     Walnut Creek
                                              Stanford University
  David N. Kennedy                                                                        Lynne G. Zucker
  Retired Director                                                                        Director and Professor of
  California Department of                                                                Sociology and Policy Studies
  Water Resources                                                                         UC Los Angeles
  Sacramento




Standing left to right: Sullivan, Kennedy, Zucker, Darby, Shelton, Levine, MacCalla, Judd, and Sweeney.
Sitting left to right: Byer and Chester.

                                                               12
FELLOWS


  E   stablished in 1997 to provide answers to pressing problems in
       diverse areas of science and technology, CCST's Fellows
  program provides creative yet thorough answers to complex
  science and technology questions. The CCST Fellows are a group
  of scientists, engineers, and technical experts selected because
  they are leaders in science and technology. As CCST Fellows, they
  are available to address technical issues that affect California's
  economy and quality of life by sharing their knowledge and
  expertise.
  Fellows Director Lea Rudee broadened the role of the Fellows in
  the past year. Rudee, former dean of engineering at UC San Diego
  and now coordinator of the school's Graduate Program in
  Materials Science, became the Fellows director in the spring of
  1999. With his guidance, the roster of Fellows has
  expanded to include experts from the medical field.
  In addition, plans for regional meetings of Fellows
  and recruitment of additional Fellows will enhance
  the program network.
  CCST presented this year's newly appointed
  Fellows at an inaugural dinner at the May 2000
  Council meeting. Senate Majority Leader Richard
  Polanco (D-Los Angeles) honored the group of dis-
  tinguished scholars and scientists by introducing a
  Senate Resolution praising the CCST Fellows "for
  their outstanding and exemplary record of diligent
  and devoted service to, and concern for, the people
  of the State of California, and…their continuing
  dedication to their professions and service to soci-
  ety."
  The Fellows have taken leading roles in various CCST Fellow and Nobel Laureate, David Baltimore with a Caltech
                                                        graduate student.
  CCST activities. Seven Fellows served as members
  of the Public Interest Energy Research (PIER) pro-
  gram review panel. Fellows have participated as panelists and
  speakers in CCST-sponsored forums and discussions across the
  state focusing on S&T infrastructure issues. CCST also was asked
  by the Division of Science, Technology, and Innovation of the
  State's Trade and Commerce Agency to identify Fellows to review
  proposals for the California Technology Investment Partnership
  Program (CalTIP). CalTIP is a competitive grant program that
  provides matching funds to California companies that are com-
  peting nationally for federal awards as they seek to create new,
  globally competitive commercial products.




                                                  13
                     COUNCIL MEETINGS

                       T   he California Council on Science and Technology meets three
                           times each year. These meetings serve as important forums to
                       share information and new ideas about CCST and
                       the state of S&T innovation. Increasingly, visitors and guests
                       include high-level decision makers and heads of state agencies.
                       Among CCST meeting guests during 1999-2000 were Senator
                       John Vasconcellos (D-San Jose); Assemblymember George
                       Nakano (D-Sacramento); Tal Finney, Policy Director in the Office
                       of the Governor; Interim Secretary for Education Sue Burr; Joe
                       Raguso, Deputy Secretary, Division of Science, Technology, and
                       Innovation for the Trade and Commerce Agency; and Patrick
                       Lenz, Executive Vice Chancellor of the California Community
                       Colleges.
                       In addition, each meeting featured a specific topic and a
                       dinner speaker with expertise in an area of interest for future
                       CCST projects. Following are highlights of the 1999-2000
                       presentations.

                           OCTOBER 1999—MAJOR                 THEME:
Burton J. McMurtry         V E N T U R E C A P I TA L
                       The featured speaker was Burton J. McMurtry, a general
                       partner of Technology Venture Investors, a series of venture
                       capital partnerships launched in 1980. McMurtry is also a
                       founding member of CCST and a CCST Fellow.
                       In his keynote address, titled “California’s Entrepreneurial
                       Machine Organism,” McMurtry described the changes in the
                       venture capital business over the past 30 years and how the
                       Internet and other technologies have affected the California
                       economy.
                       McMurtry described how the use of the Internet has expanded
                       with astonishing speed. For example, it took 38 years for the
                       radio to reach 50 million North American users. In comparison,
                       the Internet reached 50 million users in four years. He also said
                       that venture capital commitments have increased dramatically in
                       recent years, mostly in the area of information technology.

                           FEBRUARY 2000—MAJOR                  THEME:
                           E-COMMERCE
        Hal Varian     The keynote speaker was CCST council member Hal Varian,
                       dean of the School of Information Management and Systems at
                       UC Berkeley. Drawing on his new book, co-authored with UC
                       Berkeley Business Professor Carl Shapiro and titled Information
                       Rules: A Strategic Guide to the Network Economy, Varian
                       discussed the sales tax implications for e-commerce. He also




                                   14
highlighted the elaborate legal and policy infrastructure
currently being developed for e-commerce. It includes provisions
related to contracts, licensing, consumer protection, fraud, crime,
liability, and privacy. Legislative initiatives are being enacted at
the federal, state, and interstate levels.

     M AY 2 0 0 0 — M A J O R T H E M E :
     G E N E T I C A L LY M O D I F I E D F O O D S
Michael T. Clegg, professor of genetics and dean of the College of
Natural and Agricultural Sciences at UC Riverside, spoke on
“What are transgenic crops and why is there a controversy?”
Clegg is chair of the National Research Council Commission
on Life Sciences, which is currently examining the scientific,
economic, and social implications of genetically modified foods.
He discussed ways in which technology has been used to
produce first-generation transgenic plants that effectively
combat pest, weed, and plant diseases.                                          Michael T. Clegg

Partly as a result of this discussion, CCST has been asked to
provide independent expert review and examination of the
scientific, economic, and social implications of genetically
modified foods. Findings of the study and recommendations
will play an important role in shaping policy and in planning
for California’s future needs.




USDA researchers have developed disease- and insect-resistant wheat varieties
through genetic modification and are hoping to use new methodologies of
introducing genes into grain embryos to develop nutritionally enhanced wheat.




                                                        15
                1999-2000 CCST BOARD MEMBERS

Karl S. Pister, Chair                                          David L. Goodstein
Vice President-Educational Outreach                            Vice Provost and Frank J. Gilloon Distinguished Teaching
University of California                                       and Service Professor
Chancellor Emeritus                                            California Institute of Technology
UC Santa Cruz
                                                               Susan Hackwood
Lloyd Armstrong, Jr.                                           Executive Director
Provost and Senior Vice President of Academic Affairs          California Council on Science
University of Southern California                              and Technology

Warren J. Baker                                                Paul C. Jennings
President                                                      Professor of Civil Engineering and Applied Mechanics
California Polytechnic State University                        California Institute of Technology
San Luis Obispo
                                                               Glee Johnson
Malcolm R. Currie                                              Senior Advisor to the Chancellor
Chair, Board of Trustees                                       California Community Colleges
University of Southern California
Chairman Emeritus                                              Charles H. Kruger
Hughes Aircraft Company                                        Vice Provost and Dean of Research and Graduate Policy
                                                               Stanford University
Bruce B. Darling
Vice President                                                 Henry T. Yang
University and External Relations                              Chancellor
University of California                                       UC Santa Barbara

John S. Foster, Jr.
Consultant
TRW, Inc. and
Retired Director
Lawrence Livermore National Laboratory




                      Council Member John McTague, Board Chair Karl Pister, and Council Member
                      Octavia Diener.




                                                          16
            1999-2000 CCST COUNCIL MEMBERS
Paul C. Jennings, Chair               Chrysostomos L. (Max) Nikias         Edward C. Stone
Professor of Civil Engineering        Associate Dean of Research           Director
and Applied Mechanics                 School of Engineering                Jet Propulsion Laboratory
California Institute of Technology    Director                             California Institute of Technology
                                      Integrated Media Systems Center
Robert P. (Chris) Caren               University of Southern California    C. Bruce Tarter
Senior Consultant                                                          Director
Litex Inc.                            Roger G. Noll                        Lawrence Livermore National
                                      Morris M. Doyle Professor            Laboratory
Jerry D. Caulder                      of Public Policy                     University of California
Chief Executive and Executive         Department of Economics
Chairman                              Stanford University                  Larry Toy
Akkadix Corporation                                                        President
                                      Lawrence T. Papay                    Foundation for California
Octavia Diener                        Sector Vice President                Community Colleges
President                             Science Applications International
Densmore Engines                      Corporation                          Hal R. Varian
President                                                                  Dean
Tavie Farms, Inc.                     C. Kumar N. Patel                    School of Information Management
                                      Professor                            UC Berkeley
Susan Hackwood                        Department of Physics
Executive Director                    UC Los Angeles                       John O. Wilson
California Council on Science                                              Senior Research Fellow
and Technology                        Edward E. Penhoet                    Berkeley Roundtable on the
                                      Dean                                 International Economy
Charles E. Harper                     School of Public Health              UC Berkeley
President and CEO                     UC Berkeley                          Executive Vice President and Chief
Sierra Monolithics, Inc.                                                   Economist
                                      Henry E. Riggs                       SDR Capital Management, Inc.
Irwin M. Jacobs                       President
Chairman and CEO                      Keck Graduate Institute of           Loring A. Wyllie, Jr.
QUALCOMM, Inc.                        Applied Life Sciences                Chairman of the Board and Senior
C. Judson King                        Claremont Consortium of              Principal
Provost and Senior Vice President,    Colleges                             Degenkolb Engineers
Academic Affairs                      James M. Rosser                      John Zysman
University of California              President                            Professor
William C.Y. Lee                      CSU Los Angeles                      Department of Political Science
Vice President and Chief Scientist,                                        Co-Director
                                      Maxine L. Savitz                     Berkeley Roundtable on the
Global Technology                     General Manager
Vodafone AirTouch                                                          International Economy
                                      Technology Partnerships              UC Berkeley
John P. McTague                       Honeywell
Retired Vice President                George M. Scalise
Technical Affairs                     President
and Research                          Semiconductor Industry Association
Ford Motor Company
                                      Robert J. Spinrad
William F. Miller                     Retired Vice President
Herbert Hoover Professor of Public    Technology Strategy
and Private Management Emeritus       Xerox Corporation
Graduate School of Business
Stanford University




                                                     17
                            1999-2000 CCST FELLOWS

Harold M. Agnew                           Arthur N. Chester                    John S. Foster, Jr.
Retired Director                          President                            Consultant
Los Alamos Scientific Laboratory          Hughes Research Laboratories         TRW, Inc.
Solana Beach                              Malibu                               Redondo Beach
                                                                               Retired Director
Bruce N. Ames                             Carol T. Christ                      Lawrence Livermore National
Professor of Biochemistry and             Vice Chancellor and Provost          Laboratory
Molecular Biology and Director            UC Berkeley
National Institute of Environmental                                            T. Kenneth Fowler
Health Sciences Center                    Steven Chu                           Professor Emeritus
UC Berkeley                               Nobel Laureate and Professor         Department of Nuclear Engineering
                                          of Physics                           UC Berkeley
Francisco J. Ayala                        Stanford University
Donald Bren Research Professor                                                 Edward A. Frieman
UC Irvine                                 Ralph J. Cicerone                    Research Professor and Director
                                          Chancellor                           Emeritus
Dorothy F. Bainton, M.D.                  UC Irvine                            Scripps Institution of Oceanography,
Vice Chancellor of Academic Affairs                                            Institute of Geophysics and Planetary
and Professor of Pathology                Linda R. Cohen
                                          Professor of Economics               Physics
UC San Francisco                                                               UC San Diego
                                          UC Irvine
David Baltimore                                                                Theodore H. Geballe
Nobel Laureate and President              Harry M. Conger
                                          Chairman                             Emeritus Professor of Applied Physics
California Institute of Technology                                             Stanford University
                                          Homestake Mining Company
Richard E. Balzhiser                      Walnut Creek                         Marvin L. Goldberger
Retired President and CEO                                                      Dean
Electric Power Research Institute, Inc.   Michael R. Darby
                                          Warren C. Cordner Professor of       Division of Natural Sciences
Palo Alto                                                                      UC San Diego
                                          Money and Financial Markets
C. Gordon Bell                            John E. Anderson Graduate School     Sidney H. Golub
Senior Researcher                         of Management                        Executive Director
Microsoft Bay Area Research Center        UC Los Angeles                       Federation of American Societies for
Los Altos                                                                      Experimental Biology
                                          Thomas B. Day
Robert Biller                             President Emeritus                   Bethesda, MD
Professor of Public Administration        San Diego State University           Former Executive Vice Chancellor
and The C. Erwin and Ione L. Piper                                             UC Irvine
Dean’s Chair                              Steven D. Dorfman
                                          Vice Chairman                        Susan L. Graham
School of Policy, Planning and                                                 Chancellor’s Professor
Development                               Hughes Electronics Corporation
                                          El Segundo                           UC Berkeley
University of Southern California
                                          Sidney D. Drell                      Harry B. Gray
Joel S. Birnbaum                                                               Director
Senior Vice President, Research and       Professor and Deputy Director
                                          Emeritus                             The Beckman Institute
Development                                                                    California Institute of Technology
Hewlett-Packard Company                   Stanford Linear Accelerator Center
Palo Alto                                 Stanford University                  Robert D. Grey
                                          Robert C. Dynes                      Provost and Executive Vice
J. Michael Bishop, M.D.                                                        Chancellor
Nobel Laureate and Chancellor             Chancellor
                                          UC San Diego                         UC Davis
UC San Francisco
                                          Thomas E. Everhart                   John Hennessy
Robert L. Byer                                                                 Provost
CCST Council Chair Emeritus and           President Emeritus
                                          California Institute of Technology   Stanford University
Professor of Applied Physics
Stanford University                       Sandra M. Faber                      Stephen L. M. Hockaday
                                          Professor, Astronomy and             Professor, Civil and Environmental
                                          Astrophysics                         Engineering
                                          Lick Observatory                     California State Polytechnic
                                          UC Santa Cruz                        University, San Luis Obispo



                                                            18
                              1999-2000 CCST FELLOWS

David A. Hodges                       Mark D. Levine                          Venkatesh Narayanamurti
Professor of Electrical Engineering   Director                                Gordon McKay Professor of
UC Berkeley                           Environmental Energy Technology         Engineering and Applied Science and
                                      Division                                Dean
Theodore L. Hullar                    Lawrence Berkeley National              Division of Engineering and Applied
Director                              Laboratory                              Science
Center for the Environment                                                    Harvard University
Cornell University                    Johnetta MacCalla                       Cambridge, MA
Ithaca, NY                            CEO
                                      ASCI, Inc.                              J. Fernando Niebla
Lewis L. Judd, M.D.                   Irwindale                               President
Mary Gilman Marston Professor                                                 International Training Partners
of Psychiatry and Chair               Perry L. McCarty                        Orange
Department of Psychiatry              Professor of Environmental
School of Medicine                    Engineering                             David Okrent
UC San Diego                          Stanford University                     Professor Emeritus
                                                                              Engineering and Applied Science
David N. Kennedy                      James L. McGaugh                        UC Los Angeles
Retired Director                      Director
California Department of Water        Center for the Neurobiology of          Raymond L. Orbach
Resources                             Learning and Memory                     Chancellor
Sacramento                            UC Irvine                               UC Riverside

Robert P. Kennedy                     Burton J. McMurtry                      Elisabeth Paté-Cornell
Consulting Engineer                   General Partner                         Burton and Anne McMurtry
RPK Structural Mechanics              Technology Venture Investors            Professor and Chair
Consulting, Inc.                      Menlo Park                              Department of Management Science
Yorba Linda                                                                   and Engineering
                                      Duane T. McRuer                         Stanford University
Charles F. Kennel                     Chairman
Vice Chancellor of Marine Sciences    Systems Technology, Inc.                C. Kumar N. Patel
and Director                          Manhattan Beach                         Professor
Scripps Institution of Oceanography                                           Department of Physics
UC San Diego                          Jarold A. Meyer                         UC Los Angeles
                                      Principal
Lee R. Kerschner                      J.A. Meyer Associates                   Jack W. Peltason
Vice Chancellor Emeritus              Martinez                                President Emeritus/Chancellor
California State University                                                   Emeritus
Weimar                                Douglas C. Moorhouse                    UC Irvine
                                      Chairman Emeritus
Steven E. Koonin                      Woodward-Clyde Group, Inc.
Vice President and Provost            Calistoga
California Institute of Technology

Arthur Kornberg
Nobel Laureate and Merner
Professor of Medical Science
Stanford University

Daniel E. Koshland, Jr.
Professor of the Graduate School
UC Berkeley

James U. Lemke
President
AEROLIFT, INC.
San Diego



                                             Board Member Charles Kruger, Council Member Henry Riggs,
                                             and Fellow James Sweeney.


                                                     19
                           1999-2000 CCST FELLOWS

Joseph Penzien                           Robert N. Shelton                   Max T. Weiss
Chair, Board of Directors                Vice Provost for Research           Retired Vice President and General
International Civil Engineering          University of California            Manager
Consultants, Inc.                        Oakland                             Electronics Systems Division
Berkeley                                                                     Northrop Grumman Corporation
                                         John B. Slaughter                   Los Angeles
Burton Richter                           Irving R. Melbo Professor of
Nobel Laureate and Director Emeritus     Leadership                          Robert H. Wertheim
Stanford Linear Accelerator Center       Rossier School of Education         Private Consultant
Paul Pigott Professor in the Physical    University of Southern California   Science Applications
Sciences                                 President Emeritus                  International Corp.
Stanford University                      Occidental College                  San Diego
                                         Los Angeles
James E. Roberts                                                             Henry T. Yang
Chief Deputy Director                    Cornelius (Neal) W. Sullivan        Chancellor
California Department of                 Vice Provost for Research           UC Santa Barbara
Transportation                           University of Southern California
Sacramento                                                                   Richard N. Zare
                                         Bob H. Suzuki                       Marguerite Blake Wilbur Professor
Stephen D. Rockwood                      President                           in Natural Science
Executive Vice President                 California State Polytechnic        Stanford University
Science Applications International       University, Pomona
Corp.                                                                        Abe M. Zarem
San Diego                                James L. Sweeney                    Founder and Managing Director
                                         Professor                           Frontier Associates
James M. Rosser                          Department of Management Science    Beverly Hills
President                                and Engineering
CSU Los Angeles                          Stanford University                 Ed Zschau
                                                                             Professor of Management
F. Sherwood Rowland                      Clarence A. Syvertson               Graduate School of Business
Nobel Laureate and Donald Bren           Retired Director                    Administration
Research Professor                       NASA Ames Research Center           Harvard University
UC Irvine                                Saratoga                            Los Altos

William J. Rutter                        R. Michael Tanner                   Lynne G. Zucker
Chairman                                 Executive Vice Chancellor           Director and Professor of Sociology
Chiron Corporation                       UC Santa Cruz                       and Policy Studies
Emeryville                                                                   UC Los Angeles
                                         Chang-Lin Tien
John H. Seinfeld                         NEC Distinguished Professor of
Louis E. Nohl Professor and              Engineering and Former Chancellor
Division Chair of Engineering and        UC Berkeley
Applied Science
California Institute of Technology       Ignacio Tinoco, Jr.
                                         Professor
Charles V. Shank                         Department of Chemistry
Director                                 UC Berkeley
Lawrence Berkeley National
Laboratory                               David H. Warren
                                         Executive Vice Chancellor
Lucy Shapiro                             UC Riverside
D.K. Ludwig Professor of Cancer
Research in the School of Medicine       Carl J. Weinberg
Department of Developmental Biology      Principal
Stanford University School of Medicine   Weinberg Associates
                                         Walnut Creek




                                                         20
PHOTO CREDITS

Stan Carstensen, CSU Los Angeles;
Page 5.

Chuck Colgan, Scripps Institution of Oceanography;
Page 6.

Johansen Photography, Sacramento, CA;
Pages 12, 14, 15 (top), 16, 19.

Lawrence Berkeley National Laboratory, Berkeley, CA;
Cover and pages 5, 7.                                          PRODUCTION TEAM
Bob Paz, California Institute of Technology;
                                                               Writer and Editor: Hank Resnik
Page 13.
                                                               with assistance from Susan Postema

Steve Walag, UC Riverside;                                     Art Director: Scott Hsu-Storaker
Page 2.
                                                               CCST Graphic Artist: Erik A. Mattila
U.S. Department of Agriculture Agricultural Research Service
Photo Library; Page 15 (bottom).                               Printer: Crystal Printing, Sacramento, CA
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