SSTI Digest

By a narrow margin, Ohio voters on Tuesday rejected a constitutional amendment that would have permitted the state to issue up to $500 million in bonds over 10 years to fund technology-based economic development projects. Defeated 51 percent to 49 percent, Issue 1 would have made up the final component of Gov. Bob Taft's proposed 10-year, $1.6 billion Third Frontier project. The remaining $1.1 billion is unaffected by Tuesday's vote.

Bond proceeds could have been used for research and development purposes, new product development and commercialization, capital formation, operating costs, and support for public and private institutions of higher education, research organizations and private companies. It would have permitted direct investment in companies by state government.

State budget woes will continue into fiscal year 2005, reports the Washington-based Center on Budget and Policy Priorities. According to the five-page A Brief Overview of State Fiscal Conditions and the Effects of Federal Policies on State Budgets, FY05 estimates released by 21 state budget offices project a combined total shortfall of up to $33 billion — or 9 percent of those states' expenditures. Moreover, the center points out the total does not include FY04 shortfalls that are already emerging in many states as revenues fail to meet projections when the FY04 budgets were approved.

While much media and political attention has been paid to the rising costs of some portions of state budgets, such as Medicare and education, the center reports that state revenues actually dropped by a total of $21.6 billion during FY03. Adjusting for inflation and population growth, state revenues for FY 2003 were $56.9 billion less than in FY01, the center finds.

To stimulate business development and job growth in rural areas, officials of the U.S. Department of Agriculture (USDA) and the U.S. Small Business Administration (SBA) signed on Oct. 31 a collaborative agreement to create the Rural Business Investment Program (RBIP). The initiative will allow newly formed venture capital investment companies to leverage private capital funds with government financial assistance and to obtain both government and private grant resources for technical assistance.

Coupling manufacturing's sharp employment drop with the perennial struggles of a rural economy and the current economic downturn can cause massive struggles for many of the country's sparsely populated areas. The closure or significant downsizing of one manufacturing plant can be terminal for a small, rural town.

To revise that prognosis, North Carolina's Rural Economic Development Center launched the Institute for Rural Entrepreneurship in late October, along with several other new initiatives.

With the support of Maryland's Department of Business and Economic Development (DBED), BrainChild Maryland was launched this week to identify and capitalize on Maryland's most promising new technologies. The for-profit company will identify university and federal lab technologies that have the greatest potential for becoming viable products and services. BrainChild Maryland will then help to transform these ideas into new spin-out companies and licensing deals.

The process of registering trademarks in multiple countries became simpler on Nov. 2 when an international treaty administered by the World Intellectual Property Organization (WIPO) entered into force in the U.S.

Under the treaty, American trademark owners who have an underlying registration or pending application at the United States Patent and Trademark Office (USPTO) may file an international application that designates one or more of the 60 countries that are members of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks. Trademark owners in other member countries also will be able to file, directly with those national offices, international applications that include a designation of the U.S.

Young, single, college-educated people are moving to large metropolitan areas, often to central cities — a trend that defies the general population’s outward migration from the same areas, according to a report based on Census 2000 data released by the U.S. Census Bureau today.

The New York, Chicago, Los Angeles and Washington-Baltimore metro areas remained popular magnets for young singles who had graduated from college, despite these areas’ overall net out-migration rates. Of the 20 largest metropolitan areas, San Francisco-Oakland-San Jose had the highest net migration gain of nearly 50,000 single college graduates in the 25- to 39-year-old range. Many favored other metropolitan destinations, including Las Vegas, Atlanta and Charlotte, N.C.

Based on the Census report and accompanying data, SSTI has prepared two summary tables presenting net migration figures for the 1995-2000 for each state and for the 276 Metropolitan Statistical Areas in the U.S. For each table, the jurisdictions are ranked by numerical gain or loss in migration.

The state table is available at: http://www.ssti.org/Digest/Tables/110703t2.htm

The table of MSAs can be found at: http://www.ssti.org/Digest/Tables/110703t3.htm

The complete MSA data set can be obtained at no charge from the U.S. Census Bureau.

With a $310 million commitment passed by the state legislature and as much as $200 million in additional support from the county government, the California-based Scripps Research Institute has agreed to locate its first branch or satellite office in northwest Palm Beach County, Fla. In return for the financial support, Scripps is to work toward employing as many as 545 workers on the site by 2011. At $935,780 per job – if the 545 target is met over the eight-year period – the project could be the most expensive tech-based economic development risk yet undertaken by the public sector.

In 2010, the end of Gov. Mike Round's second term – should South Dakota voters choose to grant him one – residents of the state will have several precise ways to measure whether or not he delivered on his economic development goals. Gov. Round's 2010 Initiative, released Oct. 15 at Mount Rushmore, is built on a few, very specific and quantifiable goals in tourism revenues, entrepreneurship, and R&D. They include:

America has fallen alarmingly behind other industrialized countries in access to and participation in college, which encompasses most education and training beyond high school, according to a study recently released by the Education Commission of the States (ECS).

Closing the College Participation Gap offers a portrait of who is participating in postsecondary education and who is likely to be most at risk for losing access to such education. Accompanying state and U.S. profiles document the extent of postsecondary participation in each of the 50 states and the nation as a whole. They also examine the conditions likely to influence access and participation, calling attention to issues that must be addressed if the nation is to compete successfully in the global marketplace.

Does it matter whether a start-up takes money from a large venture firm or a small venture firm? According to the just-released VentureOne Deal Terms Report, the answer is a resounding yes.

Using responses from executives at 269 companies that raised venture capital in 2002 and the first four months of 2003 paired with research from VentureOne, the report found that big venture firms – those with assets under management of $1 billion or more – take larger stakes in early rounds. In fact, investors in rounds led by large firms were likely to end up with 40 percent to 60 percent of a company more than half the time. In comparison, investors in deals led by small firms attained that kind of stake only 34 percent of the time.