SSTI Digest

Ohio Gov. John Kasich signed a bill (HB 233) last month that authorizes cities and villages to create Downtown Redevelopment Districts (DRDs) that can address innovation districts and/or historic rehabilitation. The DRDs permit tax abatements of up to 70 percent of increased assessments in conjunction with payments in lieu of taxes (PILOTs) or a redevelopment charge that functions as a special assessment tax. In the case of innovation districts, these charges may be used to fund loans or grants to technology businesses—specifically including R&D and technology transfer activities—or to incubators or accelerators in the district. To qualify as an innovation district, the area must include access to a high-speed broadband network capable of download speeds of at least 100 GB/S. Read the announcement...

In the last month, major new developments have occurred in TBED capital programs. Launch Tennessee and Pittsburgh-based Innovation Works both announced positive findings about the growth of their startup investment ecosystems with $1 billion being raised by Tennessee startups from 2012 to early 2016 and over $279 million invested in Pittsburgh startups in 2015. Meanwhile in Ohio, both Youngstown-based and Cincy-based startups will see an influx of capital, while a new $150 million fund focused on stem cell companies and regions has been launched.

To support the growth of Northeast Ohio’s entrepreneurial ecosystem, The Greater Cleveland Partnership (GCP) announced a limited-partner investment in JumpStart's new for-profit $20M venture capital fund. Co-investing alongside other VCs and private-sector investors, the JumpStart NEXT Fund will invest in Ohio-based companies that need to raise $2 million to $8 million in private capital to continue their growth.

Now that many governors have signed spending bills and legislative sessions are drawing to a close, the SSTI Digest will check on the status of proposals related to the innovation economy, and examine the state of technology-based economic development funding in the states. This week, we review spending bills in California, Iowa, Ohio and New Jersey.

SSTI's Tech Talkin' Govs series has returned as governors across the country formally convene 2015 legislative sessions. The series highlights new and expanded TBED proposals from governors' State of the State, Budget and Inaugural addresses.

This week, governors in Michigan, Ohio, Oklahoma, Tennessee, and Wisconsin unveiled their budget proposals. Included in the governors’ recommendations are several cases of agency restructuring and funds for workforce development, innovation tax credits, and other TBED-relevant issues.

In a new report, the Ohio Board of Regents highlights promising policies to build more competitive innovation economies by tapping into the skills, knowledge and entrepreneurship of women, African-Americans, rural residents and other underrepresented populations. The review includes models pioneered by community organizations, academic institutions, entrepreneurship support organizations, philanthropies and tech-based economic development groups that draw traditionally underrepresented residents into innovation networks and ensure that benefits of the high-tech economy reach people of all backgrounds. The board’s Subcommittee on Inclusive Competitiveness provides specific recommendations for the state’s university system, including support for the Believe in Ohio Youth STEM Commercialization and Entrepreneurship program and the Choose Ohio First Scholarship. Download the report…

In Q3 2014, venture capital (VC) investments in the U.S. dropped by 30 percent from Q2 totals, according a new report from CB Insights. Q3 VC deal levels also dropped by 10 percent from Q2 totals. The severe drop, however, can be attributed to Q2 being the most successful VC quarter since Q1 2001. The good news is that the first three quarters of 2014 saw the U.S. VC investment total reach $33.75 billion – an increase of 59 percent compared to the first nine months of last year.

Between 2000 and 2010, about one-third of U.S. manufacturing employment – approximately five million jobs – were lost as a result of new technologies in the manufacturing process or competition from abroad, according to The Brookings Institution. “The decoupling of innovation from manufacturing,” as described by Harvard Professor Venky Narayanamurti, where “Americans brought great ideas to light, but then left the execution – manufacturing, and jobs – to others” has left the United States in a job crunch throughout the supply chain. In recent years, however, U.S. companies are increasingly moving their manufacturing stateside.

In response to declining appropriations and the termination of the Space Shuttle program, NASA has had to re-orient its approach to commercial partnerships. Over the past decade, NASA has turned to private partnerships to further the agency’s goals of space research and exploration. This same impulse has driven NASA to create regional partnerships to cultivate private space industry clusters and drive the development of the Commercial Crew program, which is highlighted as a core component of the agency’s FY15 budget proposal. These efforts have changed NASA’s role in regional, high-tech economic development from that of a research laboratory to a direct partner.