When Kelli and David Foster developed the concept for an innovative computer-based teaching method to help children with learning disabilities develop reading skills, they needed funding to get their design from paper onto the computer screen.

So they turned to their own city's economic development arm for help. Orem, in conjunction with the state, recently gave the Fosters a $50,000 technology grant to help them develop their brainchild into a commercial product.The program through which the Fosters received the award is a unique state-local partnership called the Small Business Innovation Program. It was created last year to help innovators and small-business people develop their technology-based ideas for the commercial market.

So far only two cities in the state, Orem and Provo, participate with the state in the grant partnership, but others may follow.

The Commission for Economic Development in Orem helped the Fosters qualify for a grant under the program, and now will jointly fund that grant with the Utah Technology Finance Corp.

The corporation is a quasi-governmental agency set up by the Legislature to encourage research and development by making grants to high-tech companies.

Provo and Orem contribute to the funding of grants made to companies located in their individual communities. Both cities fund their portion of grant awards with federal economic development money they receive.

"We can help emerging businesses get started and really take off. The community participates directly in the business, and business people can see that a local government entity is fully behind them," said Albert Kanahele, who coordinates the program for Provo's Economic Development Department.

The funds awarded to qualifying businesses are not true grants, since those companies who experience commercial success repay the money through royalty arrangements.

But the qualifying criteria are very strict to weed out all but those businesses with the best chance of success.

"It was a very thorough investigation they put us through," said Kelli Foster. "The people from UTFC and CEDO interviewed us several times. They came down and spent hours meeting with us to look at our business plan, our product and our credentials. They wanted to know everything."

Grant applicants must have a technology-related product, process or service to develop and they must meet the state's list of qualifying criteria. The cities and a state review committee make recommendations which companies should receive grants and how much to the state corporation.

The corporation makes a final decision on which companies receive funds and in what amounts, up to a $50,000 maximum. The level of city participation in a particular grant is negotiated between the city and the corporation.

"In our case the grant will help us hire the graphic artists and programmers we need to get from the drawing board into production," Kelli Foster said. "But another thing just as important is the leverage this grant gives us to get other financial backing.

"Once your business attracts venture capital from one source, it's easier to get funding from other sources. Once someone is willing to back you, it gives you a certain credibility with other venture capitalists."

The cities and the state are taking some risks by backing developing businesses, and not all those companies that get grants will succeed. But some will, and the payoff the cities and state hope for is a greater number of available jobs and a more diverse economic base.