SSTI Digest

Alternate financing schemes increasing to pay for popular TBED tool

State and local strategies to assist new technology business formation often focus on three elements: helping firms secure much needed funding or capital (either private or public), lower their operating costs, or gain access to the intellectual and knowledge resources necessary to succeed. Since successful technology business incubators or accelerators usually address all three elements, the nation’s newspapers are continually reporting on the planning, construction or expansion of these useful TBED tools. A few recent announcements are highlighted below.

 

Arizona

Redevelopment of the U.S. Geological Survey (USGS) campus in Flagstaff soon will include a new $3.6 million, 10,000 sq. ft. technology and business incubator. The April 23 Arizona Daily Sun reports the facility is included in the Innovation Campus master plan for the city-owned property. Financing for the facility and future technology park derives from a $62 million bond, to be repaid by USGS rental of other buildings on the campus.

 

California and Michigan

Pfizer, which recently laid off thousands of scientists and researchers in Michigan and donated its $50 million lab facility to Michigan State University, has set aside 26,000 sq. ft. and $10 million per year for five years to incubate new biotech companies in Torry Pines, outside of San Diego. The May 4 edition of the San Diego Union-Tribune reports, “Tenants will have to agree to an up-front equity-share agreement with Pfizer. When research is done, Pfizer will have an option to acquire the rights at a fair market price.”



[Editor’s note: Connect and Biocom, the Southern California industry trade group, are reported as supportive of the project in the article, but we wonder how much local economic development will result from big pharma mining initiatives like these.]

 

Florida

The research park at Florida Atlantic University added 3,000 sq. ft. to its technology business incubator, allowing the facility to accommodate an additional six companies. Currently, the Boca Raton Technology Business Incubator houses 16 companies in 11,000 sq. ft.

 

Maryland

On a less encouraging note, the Chesapeake Innovation Center, based in Annapolis and dedicated to helping launch homeland security businesses, is downsizing by 77 percent – from 24,000 sq. ft. to 5,400 sq. ft. The number of start-ups to be served will only be reduced by half, according to the Apr. 17 edition of the Washington Business Journal.

 

Missouri

The April 23 St. Louis Business Journal reports the University of Missouri – St. Louis is purchasing a 56,300 sq. ft. building to house a business incubator specializing in the start-up needs of businesses in technology hardware and software development. The U.S. Economic Development Administration provided $1 million toward the purchase price of the building, the paper notes.

 

North Carolina

Once completed, the new Applied Technology Building on the Transylvania County campus of Blue Ridge Community College in Brevard will include incubator space to house up to seven businesses. The center also will house programs for automotive systems, applied health and distance learning. A Community Development Block Grant provided $400,000 of the funding for the incubator, according to the Apr. 12 edition of the Asheville Citizen-Times.

 

Oklahoma

The Oklahoma Technology and Research Park board approved plans for construction of a 24,000 sq. ft. business accelerator in Stillwater. The facility, to be named after a state legislator who was instrumental in securing funding for the project, is anticipated to be ready for occupancy by next May.

 

Pennsylvania

The building that houses the bus and Amtrak stations in Harrisburg is transforming its commercial space into a technology incubator. The center, owned by Amtrak, will be run by the Technology Council of Central Pennsylvania.

 

Tennessee

The University of Tennessee is opening its Innovation Valley Center for Entrepreneurship, located on its agriculture campus in Knoxville, this summer. The new facility will be managed by the Tech2020 Center for Entrepreneurial Growth, which already operates three tech incubators in eastern Tennessee.



Also, in Nashville, the Advancement of Research Technology and Entrepreneurship Center will not open as planned, due to a shortage in funds for construction costs. A May 21 article in the Nashville Business Journal reports construction estimates for the nonprofit technology incubator recently came in at $2.2 million -- more than $1 million above what project officials were expecting. The center's management had already paid $3.8 million for a 138,000-square-foot building that was going to be renovated, using the construction money, but sources of funding totalled only $4.5 million. The ARTE Center, which was two years in-the-making, is being liquidated as a result.

The Greater Phoenix Economic Council has named Robert Hooley as vice president of emerging technology.

While the Tucson area is growing rapidly, surpassing one million residents last fall, regional economic development officials are concerned about personal income levels keeping pace with the growth. They argue that a highly-skilled and educated workforce within existing and emerging clusters is imperative to raise per capita personal income and to improve the region’s economic growth along with its burgeoning population.

 

Tucson Regional Economic Opportunities (TREO) recently released an Economic Blueprint that identifies five major focus areas and outlines an action plan utilizing a cluster development strategy for sustained growth and a competitive state economy. These areas include:

Donna Kent resigned as president and CEO of the Arizona Technology Council to accept a position with Televerde, a marketing service solutions provider based in Tempe.

Dick Munson is stepping down as executive director of the Northeast Midwest Institute to help start Recycled Energy Development, LLC.

Earlier this month, Gov. Janet Napolitano presented Arizonans with a three-part plan to prepare for the 21st century economy in her annual State of the State Address. The One Arizona Plan would support state economic growth by investing in education, physical infrastructure and innovation. During her address, Gov. Napolitano emphasized the need to increase Arizona’s innovation capacity and to build a technologically-savvy workforce. The One Arizona Plan would approach these goals by increasing curriculum requirements for K-12 students, creating incentives to attract and retain high-quality educators, build new academic research facilities, and offer financial support for high-tech researchers and entrepreneurs.

 

The governor’s Executive Budget Proposal for fiscal year 2008 provides more details about the plan and its implications for state TBED. Under the governor’s plan, the state would dedicate over $75 million in new funding to science and technology initiatives, according to the Arizona Republic.

 

Science Foundation Arizona (SFAz), a nonprofit public-private partnership established last year by three Arizona CEO groups, would receive $35 million to invest in science-based research and innovation. SFAz administers several grant programs that support university research, new high-tech businesses and K-12 STEM education. The group released its strategic investment plan for fiscal year 2006-07 late last year, as described in the Nov. 27, 2006 issue of the SSTI Weekly Digest (http://www.ssti.org/Digest/2006/112706.htm#Arizona).

 

The One Arizona Plan would enable Arizona to increase its investment in K-12 education by $383 million and contribute $115 million to postsecondary institutions. The proposal would allocate $15.5 million of these funds to improve math and science education. Specific initiatives include:

SSTI annually scans the inaugural, budget and state of the state addresses given by the nation's governors to see how TBED priorities fare as the state leaders present their legislative priorities for the year. If the addresses are right, more than a handful of states will be "the" leader for alternative or renewable energy within a variety of time spans. Highlights of speeches available at press time include:



Arizona

Gov. Janet Napolitano, State of the State Address, Jan. 8, 2007

"I want to focus on where we go from here, where we will take Arizona in the 21st century. There are three components to this One Arizona Plan – the keys to making our state stronger than it has ever been:

The first key is Education … to guarantee that every young person who graduates from Arizona’s schools is truly prepared for a world of competition and innovation...The third key is Innovation.



"From our educators, we need a new emphasis throughout our school system that encourages curiosity, discovery and invention. We want technology embedded in our schools – to enhance the learning process and to improve students’ understanding of it. We need specialized environments for students who are especially gifted or just especially interested in particular areas of study – like advanced math, bioscience, information technology, civics and language. We also need specialized environments for students who need additional help or who do not do well in a standard classroom. And we must support out-of-school time, hands-on activities – such as science fairs and robotics clubs – so that students can apply their learning in experiential ways. ...



"... My budget also will include additional funding for the biomedical campus in Phoenix. This funding will put us in a position to generate new doctors more quickly and tie the medical school in with key biomedical research and education initiatives. ...



"... The cornerstone of (my plan entitled) Innovation Arizona is a Global Competitiveness Innovation Initiative that will focus on expanding access to high-tech, high-wage success. First, we need a different economic and job creation strategy – making sure 'different' means 'better' and 'globally competitive.' The essential factors must be integration, coordination, flexibility and strategic focus. We must modernize the Department of Commerce and develop a coherent investment strategy. The result should be an Arizona that attracts and creates jobs in innovative, high-growth industries, expands global investment and trade, and supports strategic research and development.



"Second, we will begin to restore Arizona’s innovation investment fund. The Commerce and Economic Development Commission has a strategic investment fund that has been used to pay for the agency’s operations rather than to jumpstart businesses across our state. ... (T)he right investment at the right time can make all the difference and can literally be the difference between the creation of the next Microsoft and an inventor whose product never leaves the drawing board in his garage. That’s why it’s time for us to put the CEDC investment fund back in business. Let’s make sure every Arizona inventor or small business has access to the capital needed to make sure the birthplace of the next Microsoft is right here at home.



"Third, we will launch a global effort to bring new high-wage jobs to Arizona by attracting non-U.S. based companies to locate or expand their operations here. ...it’s time to wake up to an Arizona that’s leading the nation in innovation. We’ll send this message by developing a global brand for our state. We’re going to take it on the road – and to the air – to bring business and foreign investment home. Call it in-sourcing.



"Finally, Innovation Arizona is going to continue to build on the work we’ve begun to transform Arizona into a center of research by continuing the necessary funding to foster Science Foundation AZ to success."



California – see article in this issue of the Digest.



Hawaii – see article in this issue of the Digest.



Maine

Gov. John Baldacci, Inaugural Address, Jan. 4, 2007

"Our people can compete anywhere in the world, but we need to build our capacity and our competitive edge in the global marketplace.



"We will do this by committing to investments in innovation and research and development that fuel private sector jobs and economic growth.



"We will expand Pine Tree Zones enabling companies in Maine to have a level playing field and attract new business to this state.



"We will do this by making commitments in education through 50% tuition reimbursement at community college rates for those students who couldn’t afford to otherwise and who attend a state college or university. We will open the doors to higher education wider than ever before, so students are ready to learn and ready to succeed here in Maine."



New Hampshire

Gov. John Lynch, Inaugural Address, Jan. 4, 2007

"Innovation spurs economic growth, and creates opportunities for all of our people. Creating a research-and-development tax credit will nurture creativity and attract emerging industries to New Hampshire. It is a small investment that will pay big dividends for our workers and for our families."



New Jersey – see related article in this issue of the Digest.

Gov. John Corzine, State of the State Address, Jan. 9, 2007

"We are poised to build the world-class New Jersey Stem Cell Research Institute as well as biomedical research labs across our state. Those investments will cement our position as the medical research capital of America and, in time, improve the lives of all humanity. And let me add, we should build on these historic plans by asking the public in 2007 to approve stem cell research grants."



New York

Gov. Eliot Spitzer, State of the State Address, Jan. 3, 2007

"We must first adapt to the Innovation Economy. This is the knowledge-based economy of new businesses and new ideas that has become the driving force of job creation in the world today.... The third part of our plan is to provide the infusion of capital necessary to catalyze our Innovation Economy. We will propose a Stem Cell and Innovation Fund – led by Lieutenant Governor David Paterson – to be presented to the voters for approval. The fund will provide long-term investment, overseen by independent industry experts, for stem cell innovations and other types of applied research that will lead to direct commercial application. This investment will repay itself many times over in increased jobs, economic activity and improved health.



"To close the (digital) divide, we must implement a Universal Broadband Initiative to ensure that every New Yorker has access to affordable, high-speed broadband."



South Carolina – see article in this issue of the Digest.



South Dakota

Gov. Mike Rounds, State of the State Address, Jan. 9, 2007

"The second major concept of the 2010 Education Initiative is called Finishing Strong. It provides opportunities that prepare all students for postsecondary education and success in today's highly competitive global economy. Fishing Strong includes the laptop initiative, which provides incentive money for school districts to initiate one-to-one laptop programs for high school students. I believe we should begin this pilot project this year."



Vermont – see article in this issue of the Digest.



Wyoming

Gov. Dave Fruedenthal, Inaugural Address, Jan. 2, 2007

"... But the increasing public and scientific interest in reducing the environmental impacts of energy production means we must work with industry to advance cleaner and more efficient technologies to develop our energy reserves and expand the role of renewable energy, such as wind generation, in Wyoming’s future. ...



"... Set some revenue aside, invest in the infrastructure to support our current growth and encourage diversification, build the communities and intellectual capital necessary to attract the entrepreneurs and companies of the next economy. ..."

The University of Arizona's Office of Economic and Policy Analysis seeks a highly qualified and motivated individual to conduct and advance a nationally recognized applied research program in regional economics. Focus areas include regional economic integration, cross border trade and linkages, economic impact analyses, and evaluation of economic development policies. A full description of this opportunity and others is available through the SSTI Job Corner at http://www.ssti.org/posting.htm.

Science Foundation Arizona (SFAz) has released its strategic investment plan for fiscal year 2006-07, which includes grants to support university research, new high-tech businesses, and K-12 STEM education. The investment strategy will guide SFAz’s grant award decisions during its first year of operations and represents a starting point for the organization, which hopes to develop the plan into a long-term strategy for economic development.

 

The state’s 21st Century Fund, an initiative established by the governor and state legislature during the last session, provides public funding for SFAz’s grant programs. An initial allocation of $35 million will support SFAz’s five cornerstone programs, including:

Five states voted on measures that would have the effect of limiting the growth of government expenditures or taxes. Four states rejected the measures, while Arizona narrowly approved its measure.

Marie Wesselhoft was appointed interim director for the Arizona Center for Innovation, replacing Jim Fountain who is retiring this month.

Science Foundation Arizona, a new nonprofit organization, has named Bill Harris as its director.