Over the last few months, three states have announced new strategies to encourage regional tech-based economic development. Several states have experimented with how best to support or encourage regional TBED in the past, resulting in both successes and failures. In some cases, state sought partnerships at the local level in the creation of new programs while other states took a more hands off approach, such as providing seed funding to create regional technology councils.
In Massachusetts, the John Adams Innovation Institute released its first grant solicitation inviting government and nonprofit organizations to develop projects that advance opportunities for the development, retention and growth of local cluster employment in tech-related sectors. Through its Project Award Program, the Institute offers two rounds of funding per year, with one-time grants ranging from $250,000 to $500,000. The $4 million program falls under the Innovation Institute Fund, a $15 million fund that supports regional TBED initiatives throughout the state.
In announcing the new initiative, the Institute notes, “Applicants must demonstrate a fundamental understanding of emerging market opportunities or barriers/constraints that inhibit economic growth in a region or cluster and make a persuasive case about how they propose to address them and thereby create new opportunities.” The John Adams Innovation Institute will allow projects to be structured over three years.
Proposals are being solicited from partnerships represented by municipal governments, economic development agencies, industry associations, educational institutions, and other nonprofit organizations. Private entities are expected to be involved but cannot receive funds through the program.
Officials in Indiana are taking a similar approach with the creation of a new grant program that provides matching dollars to organizations that create and implement initiatives that increase regional competitiveness. The award size, however, is smaller than those offered in Massachusetts.
The Regional Economic Development Partnership Program, founded by the Indiana Economic Development Corporation (IEDC), released a Request for Proposals (RFP) in February that requires multi-county collaboration and consultation with area businesses and education and community leaders. The objective is to build on the state’s strategic plan released last year, titled Accelerating Growth (see the May 1, 2006 issue of the Digest). Groups are eligible to receive up to $150,000, and applications are reviewed on a rolling basis throughout the year.
Funds can be used to complete regional strategies, begin implementation of previously defined initiatives or even seed a regional venture capital fund. State funds must be matched on a one-to-one basis.
Last week, Wisconsin Gov. Jim Doyle signed Executive Order 193, creating the Governor’s Business Council. The council, whose mission is to provide a forum to share best practices and develop new policy, is comprised of leaders of the state’s regional economic development organizations. Gov. Doyle’s budget commits up to $1 million to support regional projects through the business council.
Other states applying regional strategies in the past include Mississippi and Virginia. In 2003, the Mississippi Technology Alliance awarded more than $90,000 in small grants to communities around the state to establish regional tech councils (see the Feb. 21, 2003 issue of the Digest). The state also has a Certified Technology Communities Program that identifies needs or gaps in a community and provides resources to resolve those needs and gaps.
Many regional tech councils that receive start-up funding from states face financial challenges quickly. Tech councils that fail to become self-sustaining or secure other types of funding often quickly merge with other similar councils or dissolve altogether. In 1996, the Virginia General Assembly established a Regional Competitiveness Program that provided funds to 31 projects that promoted regional cooperation and addressed economic competitiveness. Both the Hampton Roads Partnership and the Hampton Roads Technology Council were funded under the program until the 2002-03 legislative sessions when funding for all of the regional councils was eliminated in the state budget. Today, the Hampton Roads Partnership is funded through memberships and investments by localities in the region.
Ohio and New York introduced programs in 2005 focusing on entrepreneurship and technology commercialization at the regional level. Ohio voters approved a $500 million bond issue that included funding for the Entrepreneurial Signature Program (ESP), which is part of the state’s Third Frontier Initiative. The $85 million program was created to increase tech-based entrepreneurial commercialization outcomes in six geographic regions. After the first round of funding in November 2006, news reports across the state were full of complaints about the “fairness” of the distribution of funds, most of which will support regional equity capital investment programs. A second distribution of funds last month balanced the total awards more evenly across the regions.
The New York State Office of Science, Technology and Academic Research (NYSTAR) recently released an RFP seeking input and guidance as to how the state’s Regional Partnership Program will be structured. The initiative is designed to help improve the ability of emerging and established technology-related companies to grow by connecting entrepreneurs to management expertise and financial resources. Proposals will be used to structure the program and certify up to 10 regional partnerships, one for each economic development region in the state, according to NYSTAR. The RFP serves as the first step in developing an effective system for sharing knowledge and commercializing new technologies.
