Recession Aftermath: States Unveil Long-Term Plans to Boost Economy

The national recession that began at the end of 2007 is "very likely over," according to Federal Reserve Chairman Ben Bernanke. Recovery, however, may be a long way off. Because states were affected differently by the economic downturn in both timing and impact, recovery for state and local economies is likely to occur at different times. Moody's Economy.com predicts, according to an MSNBC article, that job growth will return first in five states: Colorado, Idaho, Oregon, Texas, and Washington. Four of those states benefit from high-tech industries, and the fifth, Texas, has a strong base of energy industries, the article notes.

Re-examining policy and priorities in the early aftermath of the national recession, governors and business leaders in three states that are likely to be at the tail end of the recovery recently unveiled long-term economic development plans to position their respective states for sustained growth in the new economy. Following is an overview of strategic plans and recommendations unveiled in Connecticut, Michigan and Wisconsin.

Connecticut
Gov. Jodi Rell outlined last week a comprehensive strategic plan for Connecticut encompassing more than 60 strategies and initiatives intended to grow jobs, streamline government, and create a more business-friendly environment. The 550-page report spans several TBED areas important to growing the state's economy, including access to capital, technology transfer, workforce development, and support for higher education.

Pointing to the tremendous success and impact of Connecticut Innovations (CI), the state's 20-year-old public venture capital program, the authors describe an immense need for continued support of technology companies to ensure Connecticut's leadership in the new economy. To accomplish this goal, the strategy calls for the state to implement the following initiatives:

• Create a new public/private venture capital CTech Fund for the 21st Century to accelerate growth of the technology sector and position the state as a high-technology center. The fund would be a subsidiary of CI, with board members composed of those members who contribute to the fund, and seeded with $20 million in public funds with the goal of leveraging an additional $40 million to $80 million in private funds.
• Implement an angel investor tax credit of 25 percent to individuals, corporations and institutions investing in qualified, early-stage enterprises in targeted core competency areas of biotechnology, IT, digital media, and green technology. To encourage investors to make investments in high-risk, startup companies, a tax credit to cover a percentage of the loss over a three-year period for investments made in qualified enterprises also should be provided.
• Create a $20 million Technology Working Capital Fund Program to extend working capital loans and lines of credit to technology companies in Connecticut. With CI's experience in evaluating these types of companies, the fund would be self-sufficient after 10 years, the report notes.
• Expand the SBIR mission to build collaborative connections for tech-based businesses with universities, large, mid-tier, and small business. Dedicate $5 million to SBIR for matching grants to SBIR recipients and provide seed-funding to startups in the targeted sectors. Expand SBIR's matching engineers program to include digital media, IT, and green technology.

Additional recommendations for maintaining a competitive, world-class workforce focusing on the science, technology, engineering, and mathematics fields also are included in the report, which is available at: http://www.ct.gov/ecd/lib/ecd/connecticut_esp-final.pdf.

Michigan
Formerly known as Detroit Renaissance, a group of executive-level business leaders in Michigan have renamed the organization and unveiled an ambitious five-step turnaround plan to transform the state's economy based on long-term investments in innovation, entrepreneurship, higher education and state government reform.

The new organization, Business Leaders for Michigan, will continue to be led by Doug Rothwell, who previously served as CEO of Detroit Renaissance. Part of the re-organization includes adding another 25 members comprised of top-ranking CEOs from across the state, reports Crain's Detroit Business. The group plans to use its increased membership - and the potential for fundraising its leaders represent - to gain legislative support for its plan, the article states.

In making a case for change, the group says the state has been getting relatively poorer, smaller and less competitive since about the year 2000 and points to chronic budget shortfalls and the highest unemployment rate in the nation as a result. The turnaround plan, the group says, includes actions needed to help Michigan become a top ten state for job and economic growth.

While the report lacks some specificity on how the recommendations would be achieved, it outlines long-term ideas to achieve the group's goals, such as:

• Supporting collaborative regional growth strategies by prioritizing incentives and grants in those areas;
• Accelerating growth by supporting innovation and entrepreneurship across all sectors. Recommendations include increasing entrepreneurial education, creating a distinctive university-business partnership focusing on attracting businesses, growing sectors and retaining talent, growing the pool of venture capital in Michigan, and expanding business incubation and acceleration services;
• Rationalize the number of colleges and universities to a number the state can support long-term and increase funding to remaining community colleges and universities to achieve top ten status; and,
• Change the law to require the adoption of a two-year budget to more accurately project the ongoing costs of programs.

The Michigan Turnaround Plan is available at: http://businessleadersformichigan.com/files/MichiganTurnaroundPlanFINAL9-9-09.pdf.

Wisconsin
Charged with developing recommendations on creating jobs through University of Wisconsin (UW)-led research and increasing technology transfer to Wisconsin companies, the Research to Jobs Task Force put forth a plan that involves creating seven or more Emerging Technology Centers.

Administered by individual campuses to focus on specific technology areas, the centers would help companies develop technologies or products. Two such centers already exist within the system: UW-River Falls Tissue and Cellular Engineering Center and the UW-Platteville Nanotechnology Center for Collaborative Research.

The task force, which was formed by UW System President Kevin Reilly in February, estimates a cost to the UW System of $7.7 million. This is based on projected costs of $450,000 per center in the first year and a total of $650,000 for the remaining four years, after which time the centers are expected to become self-sufficient. Total industry and in-kind support for years 1-5 is estimated at $2.6 million with additional support anticipated from private and extramural funding.

Several action items for the UW System and the private sector or joint public-private sectors also are outlined in the report. Some of the ideas include:

• Amending the UW leave of absence policy to allow the Board of Regents to extend leaves of absences for up to five years for faculty engaged in startup activity;
• Identifying and retaining qualified and experienced CEO candidates, for a limited time, in startup companies through an Entrepreneur-in-Residence program; and,
• Recruiting SBIR grant writers and coaches.

The full report of the Research to Jobs Task Force is available at: http://wis.uwsa.edu/news/2009/09_2009/Research-To-Jobs-Report.pdf.

Attend SSTI's Annual Conference for More Fresh Ideas
The three examples above are indicative of organizations and states that are looking forward and seizing the moment even during this economic downturn. If you're trying to break new ground in building tech-based economies, SSTI's Annual Conference has the agenda and speakers you've been looking for. With just the right mix of speakers challenging conventional thinking and sharing best practices, the conference will send you home with a new set of ideas and energy to undertake the work ahead. For more information, visit http://www.ssticonference.org.