July 7, 1981

Gov. William A. O'Neill today signed legislation making Connecticut the first state, according to Connecticut officials, to authorize urban ''enterprise zones'' designed to stimulate economic development in depressed areas of cities. The 10 percent state corporate income tax will be cut in half for 10 years for manufacturing businesses that locate in these zones provided that 30 percent of their employees live in the zones. Any manufacturing business that locates in the zones will also receive $1,000 grants for each job created and will be given an 80 percent reduction in local property taxes for five years. State-financed training assistance will be provided for employees who are hired locally. The law does not specify who is eligible for such training assistance, but state officials said the intention was to train unskilled, unemployed workers who live in the zone. .

With the summer cycling season in full swing, New York City officials have begun a ''safety offensive'' that they hope will reduce the number of accidents involving bicycles in traffic. For the first time, seven traffic-control agents and two police officers have been assigned full time to try to keep motor vehicles, bicycles and pedestrians separate on the city's roadways. The traffic agents are being posted at intersections where there have been unusually large numbers of accidents involving pedestrians. The police officers will concentrate on giving summonses to motorists and cyclists who disobey traffic laws.

WASHINGTON Although its glamorous sister, the Consumer Price Index, gets more public attention, it is the Producer Price Index that corporate strategists, bond traders, economic forecasters and other professionals regard as the more important measure of inflation. "The P.P.I. is probably a better estimator of developing inflationary pressure," says Donald Ratajczak, a forecaster at Georgia State University and a student of the subject. "If you're a good reader of the P.P.I. you'll know three months ahead" what's happening to certain prices at retail. But the Producer Price Index, which will be released on July 7 for the month of June, is not a secret key that can be used to unlock the economic future. In recent years, in fact, the explosion in oil prices has exposed its shortcomings as a predictor of consumer prices even as the Government has moved to increase its overall utility.

FIRST By JANE E. BRODY ITHACA, N.Y. THOUGH it may seem like a sick joke to those whose vacations are now being ruined by the persistent and painful bites of black flies, Edward Cupp, an entomologist at Cornell University, spent five years and about $150,000 figuring out how to mass-breed the pesky creatures in his laboratory. As Dr. Cupp sees it, establishing continuously breeding colonies of black flies in a controllable environment is the crucial first step in developing better ways to get rid of them. The method developed to breed the flies illustrates how inventive scientists often must be to solve a seemingly straightforward research problem. The blood-sucking flies, found throughout the United States wherever there is unpolluted fresh-running water, are daytime biters that slash through skin with scissor-like mouth parts and have little or no respect for the usual deterrents.

An article in Business Day yesterday gave a wrong first name for the Yale University expert on occupational health who has studied exposure to asbestos. He is Dr. Robert Sawyer.