SSTI Digest

Funding is inlcuded for Gov. Andrew Cuomo's regional economic development initiatives under a FY13 budget agreement between the governor and legislative leaders announced earlier this week. This includes a new round of funding for the state's 10 regional councils and university challenge program initiated last year. The agreement also provides a down payment on the Buffalo Regional Innovation Cluster and funding to create a statewide energy initiative. The budget agreement authorizes $220 million in a second round of funding for the regional councils to implement strategic plans identified last year (see the Dec. 7, 2011 issue of the Digest). Of this amount, $150 million is new capital funding and $70 million is tax credits from the Excelsior Jobs program, according to the governor's office. Lawmakers also agreed to provide funding for the Buffalo Regional Innovation Council, announced by the governor in his State of the State address. The budget includes $100 million for the first year, with $75 million in capital funding and $25 million from the Excelsior Tax Credit program. The $1 billion, multi-year effort aims to bring high-tech industries and jobs to the Buffalo region. A new round of $30 million in capital funding also is included for the NYSUNY 2020 Challenge Grant program, which allows four university centers to apply for challenge grants to expand facilities and enhance research-focused programs. In support of the 2013 state energy plan, the budget agreement includes $16.2 million to the New York State Energy Research and Development Authority for R&D programs. Under the initiative, the state will develop an action plan for short- and long-term energy projects. The budget also establishes the New York Works Task Force to coordinate capital plans and oversee investment in projects. The task force is made up of 15 members appointed by the governor and legislature. Lawmakers are expected to vote on the budget bills by the end of the week with the new fiscal year starting April 1. Read the governor's press release: http://www.governor.ny.gov/press/03272012budgetagreement.

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.

Governors in Kansas and New York unveiled budget proposals for FY13 that would maintain funding for economic development proposals initiated last session. In Kansas, Gov. Sam Brownback proposed funding for a new Creative Industries Commission, while New York Gov. Andrew Cuomo proposed a new round of $200 million in competitive grant funding for the state's regional economic development councils.

SSTI's Tech Talkin' Govs series has returned for its 12th annual edition. The series highlights new and expanded TBED proposals from governors' State of the State, Budget and Inaugural addresses across the nation. The first installment includes excerpts from speeches delivered in Georgia, Iowa, New York, Kentucky, South Dakota, Vermont, and Virginia. Georgia Gov. Nathan Deal, State of the State Address, Jan. 10, 2012 "... I want to announce two ambitious goals. Georgians deserve a world-class, public medical university, and it will be a priority of this administration to have a medical college among the top 50 nationally. ... "... Also within this push, the Georgia Health Sciences University will seek to become the state's second National Cancer Institute designated Cancer Center ... This designation would mean greater access to research dollars and enhance our ability to recruit top cancer specialists. "... To support this goal of a second Georgia-based Cancer Center, my budget proposal includes an investment of $5 million. ... "... Businesses require a talented workforce and strong infrastructure, but they also require a business environment that allows them to compete in today's global marketplace. "With that in mind, the Georgia Competitiveness Initiative pulled together business leaders and more than 4,000 Georgians across the state to develop a strategy that would improve our business case. ... "... First, I am proposing the elimination of the sales tax on energy used in manufacturing, a move that will align us with many of our top competitors. This will have a dramatic impact on manufacturers' overall cost structure and vastly improve the competitive position of our producers. ... "... A third piece, we are proposing to restructure Georgia's Job Tax Credits and Quality Jobs Tax Credit programs. ... We will modernize our job tax credits to better incentivize small business growth and to help every Georgia community compete with their regional peers." Iowa Gov. Terry Branstad, Condition of the State Address, Jan. 10, 2012 "... I am today proposing a four point plan of action — a focused initiative designed to help create the jobs we need today and the careers we need tomorrow. ... "... Last year the legislature directed us to create a replacement for the Grow Iowa Values Fund and we are proposing a new $25 million annual investment in our existing High Quality Jobs Program. ... "In addition, my proposal will be structured so state investments in the program will decline over time so the program will be self-funding within 10 years as a direct result of the jobs it brings to Iowa. "The third component of my jobs and careers action plan will encourage those small businesses that supply key components to our strong manufacturing sector to grow their facilities and create new jobs in Iowa. ... I will offer legislation that removes the barriers that discourage suppliers from bringing their businesses close to their best Iowa customers." Kentucky Gov. Steve Beshear, State of the Commonweatlh Address, Jan. 4, 2012 "We need a way to encourage a type of private investment called 'angel investing,' in which individuals help fund new companies. Mid-level entrepreneurs are in particular need of funding, because many are too small to attract big venture capital and too large for other forms of start-up assistance. "Rep. Arnold Simpson has come forward again with a bill to create tax credits for individual angel investors similar to those already offered for investment funds. What this means is that Kentuckians who invest in Kentucky start-ups to create Kentucky jobs would receive a credit on their Kentucky income taxes. "At least 22 states offer a similar credit, and it is time for Kentucky to add this job-creation program to its toolbox." New York Gov. Andrew Cuomo, State of the State Address, Jan. 4, 2012 "We know from experience that large investments in growth industries can pay substantial dividends. Twenty-five years ago, the state began investing in the Albany area's high-tech industry. ... We can do it again. We did it in Albany, and we can do it in Buffalo. ... "... So, today, I say to national and global industries: Come to Buffalo. The State of New York is ready to invest $1 billion in a multi-year package of economic development incentives. ... "... Let's empower the Buffalo Regional Council to develop a viable plan to create thousands of jobs and to spur at least $5 billion in new investment and economic activity." South Dakota Gov. Dennis Daugaard, State of the State Address, Jan. 10, 2012 "Today I am proposing an effort we're calling 'South Dakota WINS,' short for 'South Dakota Workforce Initiatives.' South Dakota WINS is a twenty-point plan, in four categories, to get more South Dakotans trained and ready to work in a rapidly growing and changing South Dakota economy. "The first component of South Dakota WINS emphasizes math and science education by rewarding math and science teachers for teaching in this high-demand field. ... " ... The fourth category of our workforce initiative involves recruiting workers to South Dakota. South Dakota WINS when our working population grows by welcoming new skilled workers and encouraging the return of those who have left. ... "... Today I am announcing an innovative and first-of-its-kind relationship to attract a new generation of skilled pioneers to our state. The 'New South Dakotans' initiative will partner state government with South Dakota businesses and with Manpower, the world's largest workforce recruiter. Together we will work to identify and place 1,000 professional and skilled workers from outside of our state into jobs here in South Dakota. ... The program will focus on high-demand jobs in industries without enough in-state professionals to meet demand. ... "... I mentioned earlier the importance of math and science education to our future workforce needs ... Beginning in the 2013-14 school year, the state will pay every middle school and high school math or science teacher a bonus of $3500." Vermont Gov. Peter Shumlin, State of the State Address, Jan. 5, 2012 "In my budget address next week ... I will propose significant state investments in higher education and dual enrollment, all aimed at making Vermont students even more competitive and creating opportunities for employers to recruit the employees they are now seeking. ... "... This session, I will propose requiring an affordable and achievable Renewable Energy Portfolio standard that sets a goal to obtain 75 percent renewable electricity in 20 years." Virginia Gov. Bob McDonnell, State of the Commonwealth Address, Jan. 11, 2012 "This session, I am asking you to put $38 million more into targeted programs that spur job creation. "I have proposed state incentives and initiatives for ... technology, modeling and simulation, cyber security, international marketing, workforce development, advanced manufacturing, and life sciences. ... "... I am also proposing a new investor tax credit to provide working capital to small businesses which create 70 percent of the new jobs in America, and the extension of time during which the major business facility job tax credit may be taken. ... "... I am asking you to invest over $200 million in new funding for our colleges and universities. "Additionally, I am proposing a dynamic new funding model for higher education that ties new general funds to achieving our statutory goals. Institutions will be rewarded for increasing the number of degrees, especially in STEM-H fields; improving graduation rates, and expanding practical research. ... "... We will also continue to pursue the development of alternative sources of energy like solar, wind and biomass, as long as they are cost-competitive for consumers. ... That is why I have included $500,000 in the FY13 budget for research and development to accelerate and assist private development of the Virginia Wind Energy Area."

Finding new and creative ways for high-tech companies to succeed is an important component in business incubation. A recent study examining best practices for supporting new company formation finds it is the synergy among multiple practices, policies and services that produces optimal outcomes. At the same time, collecting standardized measures, reporting on progress annually, conducting external independent evaluations, tracking programs, and continuing to enhance practices are singled out as important policy implications. Over the past few months, several new incubator models have emerged — including a concept for a hybrid-accelerator and a startup incubator that floats. Select announcements are included below. 

On Thursday, New York Governor Andrew Cuomo's administration announced the winners of a six-month competition to secure funding for regional job creation projects. Over the summer, ten regional economic councils were created by executive order to develop plans that would improve local economies using grants, tax breaks and other state resources. The councils then pitched their plan to state government leaders (presentations and applications are available online). The four winning councils will receive $40 million each to support their plans, with the other six councils splitting the remaining $40 million. An additional $800 million in tax incentives and existing grants will also be available to support strategies in all ten regions. Best plan awardees include:

A newly established policy academy providing guidance and technical assistance will help seven states improve their environment for innovation and align state R&D investments, workforce development and education systems with current and future needs of advanced manufacturing industries. The policy academy will help each state develop a plan or overcome barriers for putting a plan into action through a highly interactive team-based process that includes input from NGA, MEP, EDA, SSTI, private sector consultants, and research organizations. Participating states include Colorado, Connecticut, Illinois, Kansas, Massachusetts, New York, and Pennsylvania. Ideas and strategies resulting from the academy's work will serve as models for all states. NIST, MEP and EDA are providing funding, leadership and technical assistance to the National Governors Association Center for Best Practices. Learn more...

As state and federal funding for higher education dwindles and the workforce needs of the new economy continue to shift, state and university officials are reevaluating how higher education is funded, its return on investment for the state, and how universities can better drive economic growth. Recent examples in New York, Ohio and Texas demonstrate how states are implementing new policies to adapt to the changing times.

Venture for America (VFA), nonprofit organization, announced its official launch and the acceptance of applications for its inaugural pool of "fellows," approximately 50, selected from the graduating class of 2012. The organization hopes to "spur enterprise and encourage entrepreneurship in parts of the U.S. that struggle to attract top college graduates."

The 10 regional councils established earlier this year to stimulate economic development and improve the business climate statewide are tasked with five primary responsibilities, and can compete for funding from a pool of $1 billion to support projects they determine to be a part of their regional strategy. Gov. Andrew Cuomo recently unveiled a blueprint for how the councils will operate with information regarding resource allocation, structure and leadership, and performance measurement.

Lawmakers last week passed a measure establishing the Innovate NY Fund to invest $25 million of federal funds in technology development organizations, research universities, and seed-stage investment funds. The Empire State Development Corporation will administer the fund and establish a competitive process for evaluating applicants. Investment priority is given to companies involved in commercialization of R&D or high-tech manufacturing.

As the cost of a college education continues to rise and good paying jobs are seemingly scarcer than ever before, many Americans are questioning the value of a college degree. A recent survey from the Pew Research Center found 57 percent of Americans believe the U.S. fails to provide good value for the money students and their families spend, and about four in ten college presidents say the system is headed in the wrong direction. At the same time, however, studies find the lifetime earnings of college graduates to be much higher than those of high school graduates. Further, students majoring in engineering, computers and mathematics can expect to make more money than any other undergraduate major.