SSTI Digest

The third installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Georgia, Hawaii, Indiana and Michigan. Our first two installments were in the Jan. 9 and Jan. 16 issues of the Digest.

A new report from TechNet finds that on the two-year anniversary of the National Broadband Plan aimed at getting more Americans to use broadband at home, the adoption rate remains about the same. The study identifies several reasons behind the plateau and calls for better coordination among policymakers and private stakeholders to improve adoption rates. Meanwhile, some states have big plans in the works to improve their broadband networks, including governors in Hawaii and New York pushing for funding to expand Internet access to underserved areas. Ohio's governor is taking a different approach in hopes of attracting new employers and cutting-edge researchers with a $10 million state-led initiative boasting broadband speeds that officials say would far exceed the rest of the nation. The TechNet report finds the number of Americans with broadband at home has remained around 65 percent since 2009 when the National Broadband Plan was implemented under the American Recovery and Reinvestment Act (ARRA). At the same time, smartphone adoption and apps usage has grown significantly. However, this is not because smartphone users are swapping broadband service at home with smartphone usage; rather, connected individuals are increasing their access while others are left behind. A society more "digitally excluded," the authors contend, contributes to a smaller domestic market for tech goods and services and a less innovative economy. Coordination and assessment is seen as key to pushing past the plateau. A clearinghouse for best practices that assembles program information would help local authorities better understand broadband opportunities and help states understand what other states are doing, the report finds. This week, Sen. Jay Rockefeller (D-WV) called for better assessment of broadband adoption programs funded by the federal Broadband Technology Opportunities Program (BTOP) by asking the Government Accountability Office to conduct a study, reports The Washington Post. The senator also sent inquiries to major broadband providers asking what programs they have in place to promote adoption and digital literacy. Read the report at: http://www.technet.org/wp-content/uploads/2012/03/TechNet-NBP-Broadband-.... Hawaii, New York Pushing Efforts to Expand Broadband Coverage With the launch of the Hawaii Broadband Initiative last year, Gov. Neil Abercrombie set a goal of providing affordable, high-speed Internet for individuals and businesses across the state by 2018. In an executive memorandum, the governor said Hawaii would use $33.6 million in ARRA funds to become the first state in the nation with direct 1 gigabit per second broadband connectivity at every public school, library and college campus. Under the plan, the Department of Business Economic Development and Tourism will create financial incentives to attract investment from providers and forge public-private partnerships offering greater access to broadband services, according to the governor's office. In December, a Pacific Business News article reported that the financial incentives to attract investors and build partnerships likely would move ahead in the 2012 legislative session. In New York, Gov. Andrew Cuomo is working with legislators to earmark $25 million from the $75 million New York Works Economic Development Fund to expand broadband Internet access to rural upstate and underserved urban areas, reports the Associated Press. The legislature would have to approve the job creating fund as well as a law allowing partnerships with private companies to implement high-speed broadband coverage, according to the article. The funding is part of the governor's FY13 proposed budget. Ohio Boosting Broadband Speed to Draw Researchers, Businesses A state-led initiative in Ohio will offer private sector businesses the opportunity to access a 100 gigabit network and state-of-the art innovation center for testing and developing new products. Gov. John Kasich announced in February Ohio's $8.1 million state investment to increase the speed of its broadband network from 10 gigabits per second (Gbps) to 100 Gbps. Another $2.3 million will help create an innovation center that would enable and test 100 Gbps technologies and promote the development of broadband, software and advanced technology applications. The network will connect Ohio's major metropolitan areas to northern and southern connection points of Internet2, a nationwide advanced networking consortium led by the research and education community. Private sector businesses would have access to the network as a partner with JobsOhio. Read more: http://www.oar.net/press/releases/2012/2012_100G.shtml.

The High Technology Development Corporation, an agency of the State of Hawaii, is responsible for promoting and advancing technology-based economic development in Hawaii. They are currently seeking applicants for two positions:

The Natural Energy Laboratory of Hawaii Authority, a semi-autonomous Hawaii State agency that developed and manages a globally unique and innovative technology incubation and commercial park in Kailua-Kona on the island of Hawaii, currently is seeking an Executive Director. The Executive Director will lead and execute NELHA's mission to develop new and diversified drivers for the Hawaii economy by providing resources, facilities and services for energy technology and ocean science research, education and commercialization activities.

The fourth installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Alaska, Delaware, Hawaii, Michigan, Missouri, Nevada, and Vermont. The first three installments are available in the Jan. 5, Jan. 12 and Jan. 19 issues of the Digest.

In April, University of Hawaii's President M.R.C. Greenwood appointed an eight-member council to develop a strategy that would increase innovation and technology transfers throughout the university system. The council recently announced a drafted of four recommendations that would help the university system to "achieve a high-value economy in Hawaii." The recommendations build and approve upon the system's existing research capacity. The recommendation also focuses heavily on creating an innovation ecosystem built upon entrepreneurship and university-private partnerships. The four recommendations include:

Citing further damage to the state's reputation as a place to do business, Lt. Gov. James "Duke" Aiona, vetoed SB 2401, a measure to suspend Hawaii's high-tech tax credit, which provides a 100 percent refundable tax credit for investments in qualified high-tech businesses. Lt. Gov. Aiona also challenged the legislature's assertion that the bill would have saved the state $93 million a year, stating that it was uncertain whether revenues from the measure could have been counted toward the state budget because a number of investors and businesses likely were to challenge the measure in court if it became law, according to a press release. Lt. Gov. Aiona is acting governor while Gov. Linda Lingle travels overseas. Read the veto letter: http://hawaii.gov/ltgov/news/files/2010/SB2401%20-%20SOBJ.pdf

Saving the state an estimated $93 million a year, Hawaii House and Senate negotiators agreed to suspend the High-Tech Tax Credit, known as Act 221, for three years, reports the Honolulu Advertiser. Lawmakers also agreed to repeal the tax credits in May rather than at the end of December, the article states. The tax credits, available for equity investments in qualified high-tech companies, were established to provide seed funding for technology and entertainment projects. Controversy over the effectiveness of the tax credits resulted in several revisions aimed at tightening restrictions over the past decade. Just last year, lawmakers passed a bill capping the tax credits for investors at 80 percent. The bill became law without Gov. Linda Lingle's signature (see the Aug. 12, 2009 issue of the Digest). The corresponding bills to suspend the credits are HB 2962 and SB2401.

Hawaii Governor Linda Lingle recently allowed a significant revision to the state's High-Technology Investment Tax Credits program become law without her signature. The program, which has provided a 100 percent credit on high-tech investments since 2001, now will cap its credits at 80 percent. Investors also will no longer be able to transfer their credits to other investors. The revisions will apply through December 2010, when the tax credit program is scheduled to expire.

With less money to spend on risky endeavors, many states are taking more targeted approaches toward economic development, seeking out sectors of the economy they consider most likely to grow and be sustainable beyond current conditions. In Hawaii, for example, lawmakers established an Aerospace Advisory Committee this session seeking long-term growth in aerospace-related industries. Missouri legislators, meanwhile, passed an "emergency jobs bill" expanding tax credits for technology business projects, and North Dakota lawmakers increased funding for agricultural research and infrastructure. The following overview provides highlights of approved budgets and legislation from the 2009 sessions in Hawaii, Missouri and North Dakota.

Karl Fooks, a past managing director for J.P. Morgan & Co. in Asia, is the new president of the Hawaii Strategic Development Corporation. Fooks replaces John Chock who retired last year.